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THE SOUTH AFRICAN

VALUERAUGUST 2016, NO 125

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National events 2016 – AGM Dinner and Seminar

SAIV and REIZ sign MoU

Is this the first recorded land sale?

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NATIONAL EXECUTIVE OFFICE BEARERS 2016/2017PRESIDENTPatrick O’ConnellVICE PRESIDENTTracey Myers LEGAL AND CONSTITUTIONDerrick Griffiths (portfolio head)Patrick O’Connell, Edwin Schoeman, Adrian VallunMANAGEMENT AND FINANCETrevor Richardson (portfolio head), Mark Bakker,Adrian Vallun, Thys Beukes, Patrick O’Connell Farrel OctoberMARKETING Tracey Myers (portfolio head), General Secretary (website)PROFESSIONAL LIAISON Patrick O’Connell (IAAO, WAVO, CBE and VAs)Tracey Myers (RICS)General Secretary (SACPVP, IVSC, SERVICES SETA and SANRAL)Adrian Vallun (AfRES, REIB and REIZ)Janet Channing Co-opted (SAGI)MEMBERSHIP AND DEMOGRAPHICSPatrick O’Connell (portfolio head)Thys Beukes, Tracy Kuyk, Gerrie Minnaar, Mark BakkerEDUCATIONTracy Kuyk (portfolio head), Edwin Schoeman, Tracey Myers, Thys Beukes

GENERAL SECRETARY’S OFFICE

GENERAL SECRETARYPO Box 35500, Menlo Park, 0102t. 086 100 SAIVf. 086 657 3164e. [email protected]

ACCOUNTSe. [email protected]. [email protected] QUERIESe. [email protected]

SAIV BRANCHESCENTRAL BRANCHt. 053 831 6500 f. 086 657 3023e. [email protected] CAPE BRANCHt. 041 396 1400 f. 086 657 3003e. [email protected] BRANCHt. 081 428 4137 f. 086 657 3031e. [email protected] BRANCHt. 012 348 1752 f. 086 657 3201e. [email protected] BRANCHt. 081 405 8402 f. 086 730 9193e. [email protected]

THE SOUTH AFRICANINSTITUTE OF VALUERS

PRESIDENT ’S

LETTER

V

Greetings fellow valuers.

It is remarkable how fast this year has

flown by. It is a year which to date has

been rather uncomfortable in terms of economic

performance, the volatile political landscape, the

ever prevalent threat of ‘junk status’ to our credit

rating, and the continued upward pressure on our

Repo Rate. When considering this, the statement

that ‘Africa is not for sissies’ could not be more relevant than it is today.

What will the impact of all this be on our lives? I’m not a scenario planner like Clem Sunter,

co-author of the popular book Mind of a Fox; I do, however, envisage that challenging

times lie ahead for us in the valuation profession. Challenges can be met with resistance

or they can be met with opportunism – or does ‘every cloud have a silver lining’? Let us

consider for a moment what opportunities may exist for us in the valuation industry.

Tough economic times result in property investors taking a closer and more critical look

at their property holdings: the tenant mix and lease tenure; revenue and expenditure;

and financial gearing, to name but a few aspects. In every instance, there exists

the opportunity for the valuer to be involved. Companies take a critical view of their

property assets – another opportunity for the valuer. Individual property owners may

be considering alternative pastures and their property values are an essential part of

their net worth calculation – another opportunity. Municipalities come under increasing

pressure to provide basic services; the funding for this will have to come from the rates

base – yet another opportunity.

Therefore, although the above is by no means an exhaustive pocket of areas where we

valuers practise, there are opportunities in every event which befalls us, either positive

or negative, but it is up to us to capitalise on those opportunities and turn them into

beneficial events in our lives. We must ensure that in every instance we act professionally,

prudently and, above all, ethically, in what we do and how we do it – these must be non-

negotiable in our lives and profession.

Thank you, valuers, for lending me your ears - until next quarter.

Patrick O’Connell

Register on www.saiv.org.za

NortherN BraNchcouNtry SemiNar

16 & 17 SeptemberAt Faircity Roodevallei Hotel

THEME: AddING VALUE

Topics and speakers bring a basket of knowledge to our

members

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NATiONAL EVENTS 2016V

this year the SAIV’s 2016 Annual National Events were hosted by

the Southern Branch. They took place on 12 and 13 May at d’Aria

Function Venue, surrounded by poplar trees, situated on the

durbanville Wine Route. The National Annual General Meeting and dinner

took place at 17:00 on Thursday 12 May. Mark Bakker, President 2014-2016,

presented his report for the year ending 29 February 2016.

PRESIdENT’S REPORT FOR THE YEAR ENdING

29 FEBRUARY 2016

Ladies and gentleman, fellow Institute members, it is with

pleasure that I present you with my President’s report.

1. NATIONAL EXECUTIVE

The National Executive was represented by the following

persons during the past year:

From the Central Branch: Thys Beukes

From the Eastern Cape Branch: Mark Bakker (President)

From KZN: Patrick O’Connell (Vice President), Trevor

Richardson (co-opted member of Natex)

From the Northern Branch: Tracey Myers, Derrick Griffiths,

Adrian Vallun, Anton Swanepoel, Edwin Schoeman

From the Southern Branch: Jenny Falk, Ali Su Smith,

Anita Cillers.

To the Natex Members, thank you for your support throughout

the year and for your dedication in serving the Institute and

its members. Your commitment and sacrifice is appreciated.

A special word of thanks goes to the Southern Branch for

hosting our Natex meeting, this AGM and the Seminar

tomorrow.

2. BRANCH ANd GENERAL SECRETARIAT

Our branches were managed by our branch secretaries.

• Central – Tertia Noordman – who has subsequently retired

• Eastern Cape – Mark Bakker

• KZN - Nicole Ellis

• Southern – Denise Liebenberg

• Northern - Anne-Marie Delport.

To Melanie - our General Secretary and her team at the

General Secretary’s office, and the Branch Secretaries -

SA Valuer Editorial Panel:

Thys Beukes (Central Branch)

053 831 6500 / 071 600 5327

Mark Bakker (Eastern Cape Branch)

041 396 1400 / 083 227 3496

Janet Channing (KwaZulu-Natal

Branch)

033 343 2868 / 082 570 5834

Tracey Myers (Northern Branch)

011 721 7141 / 083 408 1755

Dean Ward (Southern Branch)

021 400 9915 / 082 714 9490

Editor and advertising:

Patricia Leitich

[email protected]

The editor welcomes contributions

(by way of letters or articles) that are

appropriate and that address an is-

sue that is topical or of strategic con-

cern to the sector as a whole. These

should be submitted to the editor at

[email protected] for pos-

sible publication. Please, use the SA

Valuer as your platform to promote

dialogue between SAIV members.

The information and data presented

in the SA Valuer are recorded in

good faith, using sources believed

to be reliable.

The views and opinions expressed

in the SA Valuer are not necessarily

those of the SAIV, notwithstanding

the fact the SA Valuer is the official

publication of the SAIV. Neither are

they representative of the opinions

of the editor. Copyright applies to

all material contained in this issue

and reproduction in whatever form

is not permitted without the written

authorisation of the editor.

C O N T EN T SV

A u g u s t 2 0 1 6 , n o . 1 2 5President’s letter

Cover story: National Events 2016Annual General Meeting and DinnerThe South African Institute of Valuers and the Real Estate Institute of Zimbabwe sign a Memorandum of Understanding

National One-day SeminarTitle deed conditions and land use conditions: notes for a property valuer to take into account, by Maryna BothaValuation of power stations in terms of the Local Government Municipal Property Rates Act 6 of 2004’ (“LGMPRA”), by Saul du ToitFarminfo: an aid for farm valuations, by Prof Theo E Kleynhans and Dr Adriaan Van Niekerk

MPRA Standards Working Group Update: June 2016

Book launch – Real Estate Valuation Theory, A Critical Appraisal

Buying a farm - a valuer’s perspective, by Rumpff Krüger

Legal beagle – Act 70 of 1970: Subdivision of Agricultural Land Act, by Derrick Griffiths

John Loos writesWhich property sector has performed best over the past two decades?Strong retail economic fundamentals explain a large part of the retail property sector’s ‘outperformance’How have the various commercial property segments performed during the past two periods of weakness?

Purchase of the cave of Machpelah by Abraham – Is this market value? By Jerry Margolius

Perfecting the Section 118(3) Hypothec, by Chantelle Gladwin and Rogan Heale

One small step towards repairing the harm that the Mathabathe and Mitchell judgments did to property owners

Unequal Before the Law: City of Johannesburg’s Supplementary Rolls 1, 2 and 3 to the 2013 General Valuation, by Chantelle Gladwin and Tenielle Combrink

How to handle a defaulting tenant

How to spot a good property valuer? By Jannie Wessels

Rates clearance explained, by Wayne Webley

Building green costs on average only 5% more than conventional building: study

GBCSA congratulates Tshwane

SAIV at homeFellow in focus: John William WaldeckIn Memoriam:Courtney Ian RedhillGeneral Secretary’s newsBranch annual general meetings 2016Diary of upcoming eventsMembership statsNew Branch Executive Committees/Chairs 2016/2017

Professional directory

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c o v e r s t o r y

sincere thanks for your hard work and dedication this past

year; without your support our roles on Natex and my role

as President would have been considerably more difficult, if

not impossible.

A big challenge facing the Institute this past year was the

centralisation of all administrative functions in the General

Secretary’s office in Pretoria. Amongst others, logistical

and constitutional issues had to be addressed and are still

being addressed. The ultimate goal will be to streamline

operations so that we are able to provide better service to

our membership. The function of branch secretary is in

the process of being downscaled to two main functions;

that of secretarial support to the branch executive and the

coordination of events. Branches are in the process of

adopting the new branch structure.

Natex spent time over the past 2½ days undertaking an

in-depth strategic assessment and SWOT analysis of the

Institute – where we are and where we want to be. The results

of the assessment and analysis will be used going forward to

ensure that the Institute remains relevant to its members and

the industry as a whole.

3. MEMBERSHIP

Membership summary:

Looking at our membership numbers as at 29 February 2016

vs 28 February 2015 it has decreased by one member during

the past year.

At the year ending February 2016 our total membership stood

at 1191.

The decline in membership of our Institute and of persons

registered with the SACPVP is a great concern and an issue

Annual General Meeting and Dinner

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that has been discussed with Council and needs to be

addressed.

No nominations for elevation to Fellow were received during

the past year.

4. FINANCES

Financially speaking, the Institute had a trying year. Although

our overall income was up we had some big ticket items that

had to be covered. Our treasurer, Trevor Richardson, will

elaborate on these when he presents the financials for the

past year.

Going into the new financial year, Natex has made substantial

cuts in expenses to improve the cash flow situation.

5. SUBSCRIPTIONS FOR 2016/17

The National Executive has once again given serious thought

and consideration to the subscriptions. Natex has resolved to

increase annual subscriptions by 8%.

Subscriptions for members will therefore be R2 140.00

including VAT for 2016/17.

Student members’ fees will be R530 including VAT.

6. EdUCATION

Education remains a primary function of the Institute.

Branches contributed during the past year by presenting

workshops and seminars. Delegates attending the workshops

and seminars not only received valuable information and

networking opportunities but were able to accumulate

required CET hours.

Workschool – a successful workschool was run from 27 to

31 July 2015 with a tidy profit being made by the Institute.

Unfortunately the SA Council for Valuers has decided not

to outsource the 2017 Workschool but has chosen to run it

themselves...we wish them well in their endeavours.

7. SACPVP

The Institute continues to engage with the SACPVP on all

valuation related matters, a relationship that continues to

strengthen. A positive meeting was held with Council prior

to the National Executive meeting with the assurance of

continued cooperation going forward.

8. The SouTh AfricAn VAluer

This past year saw the Institute publish four issues of The

SA Valuer. The inefficiency of our postal system presents

challenges with regard to delivery of The Valuer, so this

necessitated that electronic issues had to be distributed.

Natex received positive feedback from members regarding

the electronic versions received. Going into the next year

distribution of The SA Valuer electronically will be further

explored.

I would like to take this opportunity to thank Patricia Leitich

for her contribution to the success of this publication and to

the SAIV editorial panel for their input.

All members are encouraged to support The SA Valuer

in any way possible - be it a letter to the editor, an article

or an advertisement, and by listing your company in the

Professional Directory.

9. WEBSITE

Our revamped website is up and running. The new website

enables the General Secretary’s office to, amongst other

things, undertake surveys with our members and have DVDs

of seminars available electronically. We have no doubt that

the new and improved website has a positive impact on

time spent on administrative duties, the main one being the

improved control of our membership database.

10. MPRA

This past year has seen continued emphasis placed on the

MPRA (Municipal Property Rates Act) and the necessity for

professional standards. Articles have appeared in The SA

Valuer drawing attention to the need for the development

of such professional standards. Various industry leaders

have come forward to champion the development of these

standards. We thank Janet Channing and Martin Fitchet for

driving this matter on behalf of the SAIV. It is an enormous

project. The development of appropriate MPRA guidelines

will ensure that preparation and maintenance of quality

valuation rolls can be ensured.

11. MEMORANdA OF UNdERSTANdING (MoUs) SIGNEd

This past year will be remembered as the MoU Year

• RICS

• The South African Geomatics Institute

• VAs with regard to the MPRA

• Green Building Council of South Africa

The MoUs signed represent agreements between the SAIV

and the relevant organisations to collaborate actively in

strengthening and enhancing our industries through member

discounts, cross-promotion, workshops and education

courses, industry events and networking.

12. CLOSURE

Thank you for intrusting me with the honoured position of SAIV

President for the past two years. I undertook the position

to the best of my ability and trust that your confidence was

justified.

I hereby move my report for adoption.

Thank you.

Mark Bakker

THE OFFICE BEARERS FOR THE 2016-2017 EXECUTIVE COMMITTEE WERE ELECTEd, AS FOLLOWS:

Patrick O'Connell (President) – KZN

Tracey Myers (Vice-President) – North

Mark Bakker – Eastern Cape

Thys Beukes – Central

derrick Griffiths – North

Tracy Kuyk – South

Gerrie Minnaar – North

Farrel October – South

Edwin Schoeman – North

Ali Su Smith – South

Adrian Vallun – North

Janet Channing (KZN), Martin Fitchet (KZN),

Trevor Richardson (KZN) and dean Ward (South)

were co-opted on to the committee.

FELLOWS ANd LIFE MEMBERS’ GATHERINGThe new president held the customary Fellows and Life Members’

Gathering at 16:00.

Patrick entertained the Fellows and Life Members to drinks and

reminded them that the honour of Fellow or Life Membership

of the SAIV had been bestowed upon them because they had

delivered such important service to the valuation profession.

Whether in the form of educational service or profession best

practice initiatives, their inputs had laid the foundation for the

further success of the profession.

Patrick continued: “You are members whom we are proud to

have as part of the SAIV. To this end, we would like to call on

your expertise for our workshops and seminars where your input

will be a valuable source of education to all members of the SAIV.

May we, please, ask you to make contact with your local branch

chair in order to make yourselves available to the SAIV for the

further benefit of the profession.”

NATIONAL dINNERThe National Dinner followed at 19:00. This took a rather different

form from the usual formal dinner. Members enjoyed a casual

meal which featured a Cat Steven show.

Back row, left to right: Adrian Vallun, Thys

Beukes, Mark Bakker, Edwin Schoeman,

Trevor Richardson, Gerrie Minnaar, Farrel

October, Dean Ward (alternate to Ali Su Smith)

Front row, left to right: Melanie Vallun (GS),

Tracey Myers (Vice-President), Patrick

O'Connell (President), Tracy Kuyk

Absent: Ali Su Smith, Derrick Griffiths

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The rest of the national events took place the following morning,

when John van der Spuy was the master of ceremonies.

INAUGURATION OF THE NEW PRESIdENT

Of all these, the most important was the inauguration of the

new president when the outgoing President Mark Bakker put

the President’s chain of office around the neck of Incoming

President Patrick O’Connell. According to tradition, Patrick then

pinned a Past President’s Medal onto Mark’s jacket and gave

the following acceptance speech:

“Good morning ladies and gentlemen. I stand before you this

morning both humbled and honoured to be elected as your

new President. I aim to uphold the exceptional standards of this

office, as it has been done by so many before me. I hope to do

you proud in this regard.

We live in interesting times in our country at present, both

economically and politically. On the back of this, your Natex

has been forced to take a view on where we see the SAIV in

four years from now. In 2007 we initiated a Strategic Plan with

a SWOT Analysis and, by and large, we have met the majority

of the objectives set then, so the time has come for this to

be reviewed.

We spent considerable time on Tuesday giving due consideration

to where we see the SAIV in the future. This session was

facilitated by Groundfloor Labs, an external service provider,

who guided us well in our deliberations. There is much to look

forward to, such as:

1. Education initiatives

2. Improved member services

3. Re-positioning of the SAIV as the voice of the profession

4. And so much more.

The underlying theme of this session was The best is yet

to come – this was unanimously adopted by the committee

present and now the hard work must begin.

Your Natex Committee also met for 1½ days to discuss, negotiate

and implement matters as they relate to you, our members. It

was a busy and intensive period, but it was time truly well spent.

I wish to extend, on behalf of Natex, our sincere thanks to Farrell

October and the Southern Branch team who hosted us for this

period. I would like to make special mention of Jenny Falk and

Anita Cilliers who made all our arrangements and who planned

not only today’s Seminar, but the lovely dinner last night.

Before the seminar started, a special presentation was made to

a special person who after many years of unbroken service to

the profession, had decided to step down from her roles at the

Institute – Jenny Falck. Patrick said: “For those of you who may

not know Jenny, she is a well-educated lass who holds a BCom

Honours degree in Business Economics, she is registered as a

professional valuer and she is a member of RICS.

“Jenny has served the valuation profession well at the SACPVP

in the capacity of vice-president, and serving on the Education

and Marketing Committees. Although Jenny resigned from

Council activities in 2005, Jenny is still involved in disciplinary

matters on an ad-hoc basis.

“Jenny is a Fellow of the Institute and has served on both the

local branch executive and Natex, the former for a period of

19 years and the latter for nine years. During this time Jenny

served on a number of committees and task teams dealing with

property, legislative and educational matters. She is passionate

about students and education and has made herself available

as a lecturer at the annual Practical Workschool, both locally

in Pretoria.

“Jen, on behalf of Natex and the SAIV, it is my honour to present

you with this Certificate of Commendation in recognition of

your faithful and selfless commitment to the SAIV, its members,

students and the valuation profession at large.”

The Certificate of Commendation of Long Service read:

To JennY fAlcK

for invaluable dedicated service and friendship to

members of the S A institute of Valuers, as well as

her services rendered over 19 years. to the Southern

Branch and for the past 9 years on the national

executive.

THE SOUTH AFRICAN INSTITUTE OF VALUERS ANd

THE REAL ESTATE INSTITUTE OF ZIMBABWE SIGN A

MEMORANdUM OF UNdERSTANdING

For some people ‘Friday the thirteenth’ conjures up thoughts

of matters superstitious in nature, even amongst those who

believe such things to be nonsense; for the SAIV it was a good

day. Before the start of the One-Day Seminar a Memorandum

of Understanding was signed between the SAIV and the Real

Estate Institute of Zimbabwe (REIZ), the overarching body

looking after our neighbouring real estate profession. REIZ

was represented by Siza Masuku, their current President, and

Mhlanguli Mpofu, their immediate Past President.

Patrick O’Connell said: “The purpose of the MoU is to

engender strong relationships between our two associations

and the professions. Matters such as industry best practice,

education and collaboration ranked high in the discussions

between our two parties as did the opportunities to visit

each other and attend one another’s conferences and

seminar, evidence of which is seen today. There are synergies

between our two bodies and the SAIV is most proud of this

achievement and excited that it falls directly within the ambit

of our strategy for the forthcoming four-year period to 2020.”

Siza Masuku replied: “Ladies and gentlemen, let me express

my sincere appreciation for the opportunity to attend this

splendid event in my capacity as the President of the Real

Estate Institute of Zimbabwe.

I want to thank the South African Institute of Valuers who

invited me through their General Secretary, Mrs Melanie Vallun.

Some few years back, we took the decision as REIZ to

improve the professional standing of the real estate market in

Zimbabwe. We are undertaking this initiative with the vision to

improve local investment levels and also to attract international

investors. One of the core decisions we have made towards

achieving the above is to open ourselves up to sharing ideas

with international organisations who share the same views

with us.

We are therefore, on a trajectory of establishing partnerships

and collaborations with like-minded professional organisations.

We have made tremendous progress in this direction. In the

first quarter of the year we invited MSCI to Zimbabwe. They

came, made a presentation and assessed the readiness of

the market to introduce the IPD Index. I am glad to share that

from the response that we got, before the end of this year we

might be able to have covered ground in making steps towards

launching the Index.

We continue in that direction and today we have also reached

another milestone. I have signed an MOU with SAIV on behalf

of REIZ.

I cannot hide my joy after such an accomplishment and I trust

the partnership will help by sharing ideas that help to transform

our organisations. It is a very big milestone to us, something

that we have been looking forward to do over the years. I am

happy about the progress made and I am doubtless results of

the collaboration will start to show soon.

Coming back to the business of the day, I must commend

the SAIV for a good job putting up the seminar to allow for

continuous development of professionals. I am also here to

learn and I am looking forward to learn a lot from this platform.

Before I end and time allowing, let me take this opportunity to

share a few things about the real estate market in Zimbabwe.

There is a lot of untapped potential in the real estate market

back in Zimbabwe. The market is poised for growth with a lot of

projects still on the drawing table. We believe the projects will

only take off if the locals get well equipped with the requisite

skills and investment will start flowing from within and abroad.

On the skills side and as I mentioned before we are moving to

adopt international best practices. However, on the investment

side there are a lot of unanswered questions we are also

addressing in the process. We wish not just to market ourselves

as the best investment choice but we want to first position the

market as the best by undergoing serious transformation and

adoption of international best practices.

Our market back home has been hit by grey areas mainly

professionalism, performance measurement, policy

articulation and international best practices. You find most

of the times the contribution to GDP is an estimated figure in

most of the reports. But I promise you, in no time this will be

a thing of the past. Some rigorous measures are being put in

place to address such issues. From what I have shared so far I

believe we all agree that transformation is required to continue

attracting investment into the market. It is also the missing link

to the local development of the market, essentially by directing

efforts towards investments with better returns. I would like to

also share with you that before we even came here, we said

back home, let’s look from inside and see how we can work

together to improve the market.

In this light we have decided to approach several organisations

within the built environment such as the Estate Agents Council,

Valuers Council, Property Owners Association of Zimbabwe,

Zimbabwe Association of Pension Funds, Green Building

Council of Zimbabwe and the Securities Council of Zimbabwe.

I am happy to share that many of them, if not all, acknowledged

the need to transform the market and they have thrown their

weight behind us as we partake on this trajectory.

On this note, I complete my comments and wish to thank all of

you for the support you give us.

God bless you. Thank you.

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1. John van der Spuy - master of ceremonies

2. Patrick O’Connell pins past president's badge onto Mark Bakker's lapel

3. Patrick O’Connell presents Certificate of Commedation to Jenny Falck

4. Siza Masuku and Patrick O’Connell sign the MoU between the SAIV and REIZ

5. Siza Masuku and Patrick O’Connell address the delegates

6. From left to right: Mhlanguli Mpofu – REIZ Past President, Mike Gibbons, Siza Masuku – REIZ President, Carel Hofmeyr

7. From left to right: Siza Masuku – REIZ President, Melanie Vallun – SAIV General Secretary, Patrick O’Connell – SAIV President,

Mhlanguli Mpofu – REIZ Past President

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NATiONAL ONE-DAy SEMiNARV

INTROdUCTION

Ownership is the most comprehensive right any person can

have in property. It allows the owner to do as he likes with

the thing he owns. It is, however, a well-recognised principle

of property law that ownership does not confer absolute and

unlimited entitlement on the owner. Various limitations exist

in the interest of the community and for the benefit of other

people. As a property valuer, it is important to take these

limitations into account when determining the value of a

piece of land and the buildings thereon.

LIMITATIONS

The limitations can generally be categorised under the

following headings:

1. Statutory rights, such as limitations imposed as a result of

zoning or environmental legislation

2. Title deed conditions (which often complement or duplicate

land use and zoning provisions)

3. Limited real rights (such as personal and praedial servitudes)

4. Neighbour law.

The limitations are briefly discussed below.

STATUTORY ZONING

Zoning is a device used to regulate land use and can be

described as the creation of districts within a city where

different building regulations are applied (affecting the height,

bulk and coverage of buildings on the land) and within which

different use activities are permitted or prohibited. Zoning is

controlled and regulated by the local authority. Rules set out

the purpose for which land may be used and the manner in

which it may be developed.

A landowner cannot develop his property contrary to zoning

use. For example, if X wants to buy a property in a residential

area with the intention to use it as his home and as a

professional office (attorney’s office, architect consulting) or

as a bed and breakfast establishment, he must make sure

that the zoning provisions allow such additional business use.

Depending on the scheme and zoning category (ie whether

it is Residential I or Residential II, etc), alternative use of the

property may be allowed provided permission is obtained

from the local authority, or such use may be denied outright.

In the latter instance, a prospective purchaser must consider

applying for re-zoning or should explore alternatives.

Many of the limitations on ownership in property are linked

to zoning.

TITLE dEEd CONdITIONS

The purpose of title deed conditions is generally to dictate the

use to which a property may be put, extent of building works,

setback lines and appearance. These are usually imposed

when a development is created, be it by way of new township

development conditions (imposed by the municipality when

approving the township) or conditions imposed when a

subdivision is approved. They usually have as purpose the

protection of the local amenity and character of an area for

the benefit of surrounding owners and the general public.

Title deed conditions override zoning provisions.

A development proposal may therefore not be granted if it

would contravene a title deed condition.

Conditions of title may include (i) statutory town planning

conditions – where the municipality imposes conditions

pertaining to the use of the property, the nature of the

residences that may be erected, as well as time periods

in which the buildings must be erected, etc; and (ii) non-

statutory limitations on the use of land – imposed by the

Title deed conditions and land use conditions: notes for a property valuer to take into account

The first presentation was given by Maryna Botha: The pitfalls of not checking title deed conditions. Instead of

reproducing Maryna’s brief Powerpoint address, below are the more detailed notes to the address which she

has written for publication.

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8. From left to right: Trevor Richardson, Farrel October, Mark Bakker

9. Anita Cilliers and Jenny Falck

10. Jerry Margolius and Mark Bakker

11. Erwin Rode and Kennedy Phiri

12 & 13. Enjoying wine tasting

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The conveyancer is required to disclose the condition in the

conveyancer’s certificate and further disclose the title deed

and specific condition reference in which such restrictive

condition is contained. The conveyancer must further disclose

the manner in which he recommends that the removal of such

condition be dealt with.

WHO MAY ASK FOR A CONVEYANCER’S CERTIFICATE?

As all title deeds are public documents anyone may request a

conveyancer’s certificate for any property within the Republic

of South Africa.

HOW ARE TITLE dEEd CONdITIONS REMOVEd?

This is quite an involved topic and the ambit of this note

does not cover a discussion thereof. As a general point of

departure, the following:

• A title deed condition, if imposed in terms of a municipal

ordinance on the establishment of a new township, will

generally be such that it is for the benefit of all the owners

in the township. Such conditions can only be removed in

terms of the Removal of Restrictions Act, which requires

application either to the provincial government or to court.

• Where a condition was not imposed for the benefit of other

erven but rather for the benefit of another person, such as

a personal servitude, then there is a provision in the Deeds

Registries Act that can be followed to remove the condition.

In essence, the parties will enter into a notarial agreement to

remove the condition.

LIMITEd REAL RIGHTS

Other people besides the owner may acquire entitlements (for

instance use rights) in respect of immovable property of an

owner. These are generally referred to as servitudes, being

conditions of title in favour of another party other than the

property owner.

There are two types of servitudes:

PERSONAL SERVITUdES

A personal servitude is a condition in a title deed that grants

rights to a particular person over that property. It cannot

be transferred as it vests in one particular person only and

usually until that person’s demise or a specified date. Some

examples of these include:

• Usufruct – a right that entitles a person to have the use and

enjoyment of another’s property; and

• Habitatio – a right to occupy a house, generally for tor a

prescribed time.

PRAEdIAL SERVITUdES

A praedial servitude is a provision in a title deed that is inserted

for the benefit of another erf or erven as designated in the

title deed. Terminology refers to a ‘servient’ and ‘dominant’

tenement - ‘servient’ meaning that the erf has restrictive

conditions inserted into its title deed in favour of another erf or

erven; and ‘dominant’ meaning that the erf enjoys the same

restrictions over other erven in the area to which it relates.

In the case of praedial servitudes, the rights and obligations

of the dominant and servient erven vest with each successive

owner of the property involved. An example is a servitude

right of way which will exist over one property (the servient

tenement) in favour of another property (the dominant

tenement). The servitude rights pass to new owners whenever

a property changes hands.

REGISTRATION OF SERVITUdES

Servitudes must be registered against a property’s title

deed to be enforceable against successive owners who do

not have knowledge of the servitude. This means that if two

property owners, A and B, agree in writing that B would give A

the right of way over his (B’s) property, there is a binding and

enforceable agreement between them. However, if it is not

registered against the title deeds of the properties, then the

right would not be binding on C who buys the property from B

without knowledge of B’s agreement with A. (A may well have

claims against B.)

NEIGHBOUR LAW

Neighbour law limits the right of an owner in respect of his

property inasmuch as he must take the reasonable interests

of his neighbours into consideration when exercising his own

rights. An owner may therefore not use his land in such a way

that it constitutes an unreasonable burden on his neighbours.

The criterion of reasonableness means that a property owner

may exercise his entitlements within reasonable bounds

and that the neighbouring owner or occupier must tolerate

the owner’s exercise of his entitlements within reasonable

bounds.

Examples are storm water requirements that oblige a

neighbour in a lower lying property to accept the natural

flow of water from the higher lying neighbouring property

from which the water comes. The Roman law principle with

regard to storm water management is captured in the actio

aquae pluviae arcendae, loosely translated as “the action of

obstructing the course of rain water”. The Supreme Court

original township owner in favour of himself or in favour of

each owner in the township for the purpose of establishing

and or preserving the specific character of the area. A typical

example here is the requirement in certain developments

obliging owners to become and remain a member of a

homeowners association for the duration of their ownership

in the development and in terms of which various conduct

and management rules are prescribed for these owners.

HOW TO dETERMINE WHAT TITLE dEEd

CONdITIONS APPLY

One would like to believe that establishing the nature and

content of conditions of title would be as simple as obtaining

a copy of the title deed for the specified property and reading

the listed conditions. This is so for properties registered in

all the deeds registries in South Africa, except for the Cape

Town registry (which exception will be addressed below). The

practice is to ‘bring conditions forward’ from one title deed into

the next. In other words, the current title deed of a property

contains the same conditions that appeared in the previous

title. The current title deed, then, ought always to contain all

registrable title conditions that apply to that property, whether

they were created yesterday or a hundred years ago.

In the Cape Town deeds registry, deeds need to contain, as

the very first condition in the conditions clause, the so-called

‘pivot condition’ or ‘pivotal clause’. This is because initially,

in this, the oldest deeds registry in the country, conditions

were not carried over into a new deed when the property was

transferred; only conditions created upon that transfer were

reflected in the deed. As a result, a person who desired to

learn of all the conditions applicable to a particular property

had to search back through history and had to search the

deeds registry for copies of all the title deeds that had ever

been registered for that property.

This practice was burdensome and out of line with the practice

in all the newer deeds registries, whose policy it was to ‘carry

forward’ all conditions into the next title deed. During 1918

new regulations to the then Deeds Registries Act were passed

and the Cape Town deeds registry decreed in that year that it

would follow the same procedure as the other registries.

One can imagine the potential for chaos after this decision

was taken, if conveyancers were forced to search through

all the previous deeds for a property in order to ‘collect’ all

the possible old applicable conditions before they could do a

transfer of a property.

The Registrar therefore directed that from a given date in that

year, all conditions must be carried over into new title deeds

and old conditions (ones created before this 1918 decision)

need not be ‘collected’ (searched for) and included. Rather,

the process would be that the first deed of transfer registered

for a particular property after that date, will be called the ‘pivot

deed’. (The word ‘pivot’ means a turning point; something

on which something else turns or hinges.) This is the first

deed for that property in which the conditions contained in

the previous deed (only), were repeated (carried forward) into

the next deed. From the pivot deed onwards, all registered

conditions are always carried forward.

This means too that in order to find the conditions that applied

to a property up until the 1918 date, ie which were created

before the pivot deed, one will need to search through each

and every title deed going back to when the property was

first created.

To help conveyancers to know which deed is the pivot deed

(you only need to search previous title deeds before the pivot

deed) the Registrar made a rule that the current deed must

always refer to the pivot deed. In this way, you will always

know how far back you need to start searching (backwards)

for conditions scattered through old titles.

In other deeds registries, the policy was always (since

inception of these registries) to repeat conditions in the

next deed. It was therefore never necessary for these other

registries to create a pivot deed. (Summary from discussion

on pivot deeds in The ABC of Conveyancing, JUTA (2016 ed),

ch 32.)

CONVEYANCER’S CERTIFICATE REGARdING

TITLE dEEdS

In order to get a list of all the title deed conditions applicable

to a property, you would need to appoint a conveyancer to do

the search of the title deeds in the deeds registry and to issue

you with a conveyancer’s certificate.

Conveyancer’s certificates are usually called for when an

owner is interested in further developing a property or to

change the use of a property or sub-divide a property. A

conveyancer is then instructed to do a search of the old title

deeds in the deeds office records, to ensure that there are no

restrictive conditions contained in the current and earlier title

deeds of the property which prohibit such use, development,

renovation or subdivision as the case may be.

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Valuation of power stations in terms of the Local Government Municipal Property Rates Act 6 of 2004’ (“LGMPRA”)

The first speaker after lunch was Saul du Toit, Fellow and past

president of the Institute, founder of Appraisal Corporation.

Saul’s presentation was the ‘Valuation of power stations in

terms of the Local Government Municipal Property Rates Act

6 of 2004’ (“LGMPRA”). His presentation is given below.

of Appeal confirmed this in the 2012 case of Pappalardo v

Hau, where the Court emphasised the fact that the amount

of water that must be accepted by the lower-lying neighbour

can only be the natural flow. If the higher-lying neighbour

has done something to increase the natural flow of water, for

example by paving a certain area or building a new structure,

then he has the duty to prevent the extra flow from reaching

the lower-lying neighbouring property.

Other examples relate to the obligation to lateral and surface

support, measures dealing with encroachments and the

elimination of danger. The ambit of this article does not

require discussing these in further detail.

Maryna Botha BA LLB (Stell) LLM

(UNISA) is an admitted attorney, notary

and conveyancer practising in Cape

Town. She is currently a senior associate

with national law firm STBB Smith Tabata

Buchanan Boyes and offers training

courses in various areas of the law.

Maryna has an established association

with the Centre for Legal Compliance.

Maryna publishes regular updates and

opinions and is the editor of chapters in

some of Juta’s publications.

Next Mike Gibbons, director at Mills Fitchet Magnus Penny,

spoke on ‘Valuations for listed funds’.

After the tea break Carel Hofmeyr of Du Plessis Hofmeyr

Malan Inc presented ‘Recent property judgments with special

reference to the Cape area’, which we plan to include in the

next issue of this journal. Next came Lloyd Nussey and Dave

Russel who spoke about ‘New Developments in Cape Town

by Baker Street Properties’.

Saul used the Tutuka power station as an example for his

presentation, but first gave an overview of the current Eskom

electricity supply and grid (excluding solar and wind farms).

THE SOUTH AFRICAN


This followed by examples of types of power stations.

EXAMPLES OF ESKOM POWER STATIONS CAP. (MW) LOCATION

COAL-FIRED STATIONS

Duvha 3,600 Witbank, Mpumalanga

Kriel 3,000 Kriel, Mpumalanga

Matimba 3,990 Lephalale, Limpopo

Matla 3,600 Kriel, Mpumalanga

Tutuka 3,654 Standerton, Mpumalanga

NUCLEAR STATION

Koeberg 1,940 Melkbosstrand, Western Cape

CONVENTIONAL HYDRO STATIONS –ORANGE RIVER

Gariep 360 Norvalspont, Border of the Eastern Cape and Free State

PUMPED STORAGE SCHEMES

Drakensberg 1,000 Bergville, KwaZulu Natal

Palmiet 400 Grabouw, Western Cape

GAS-FIRED STATIONS

Ankerlig 1,338 Atlantis, Western Cape

Gourikwa 746 Mossel Bay, Western Cape

WINDFARM

Sera 100 Lutzville, Western Cape

NEW BUILd PROGRAMME STILL UNdER CONSTRUCTION

COAL-FIRED POWER STATIONS

Kusile 4,800 Mpumalanga

Medupi 4,764 Lephalale, Limpopo

PUMPED STORAGE SCHEMES

Ingula 1,332 Ladysmith, KwaZulu Natal

LGMPRA FUNdAMENTALS

dEFINITIONS

“public service infrastructure” means publicly controlled

infrastructure of the following kinds: (c) power stations, power

substations or power lines forming part of an electricity

scheme serving the public;

The main power station and buildings should therefore be

valued as PSI.

"mining property” means a property used for mining

operations as defined in the Mineral and Petroleum Resources

Development Act, 2002 (Act No.28 of 2002);

Often a power station has mining land forming part of it and

falling under this definition:

“multiple purposes”, in relation to a property, means the use

of a property for more than one purpose, subject to section 9.

This is often the case with a power station, with coal power

stations in most instances comprising PSI, mining land and

agricultural land.

SECTION 17: OTHER IMPERMISSIBLE RATES: Power

stations not excluded from rates and taxes with 2014

amendments.

SECTION 46: GENERAL BASIS OF VALUATION

(1) Market value

(2) Regarding provision:

The value of any licence, permission or other privilege granted

in terms of legislation in relation to the property;

(3) Disregarded provisions:

(a) Any building or other immovable structure under

the surface subject to MPRDA;

(b) any equipment or machinery which, in relation to

the property concerned, is immovable property,

excluding –

(i) a lift;

(ii) an escalator;

(iii) an air-conditioning plant;

(iv) fire extinguishing apparatus;

(iv) a water pump installation for a

swimming pool or for irrigation or

domestic purposes; and

(vi) any other equipment or machinery that

may be prescribed.

The consideration of both the regarding and disregarding

provisions is of the utmost importance. In many instances

where we have lodged objections against the municipal

valuations of a power station it was found that the municipal

valuer has included the plant and equipment in the valuation.

This had the dire consequence that in a number of cases

the municipal budgets were placed into jeopardy because

of the huge over-expectation of rates revenue from this

source, where such revenue was reduced substantially

when the value was placed under the interrogation of an

objection and appeal process.

As will be seen from the discussion below a power station is

primarily a large engine under a canopy (in many overseas

places, especially the East there is not even a canopy). It is

like a very expensive heavy duty truck or Ferrari under a basic

canopy, whereas only the canopy is rateable!

AN OVERVIEW OF THE TUTUKA POWER STATION

TECHNICAL BACKGROUNd

Tutuka consists of six 609MW units at an installed capacity

of 3 654MW.

•Commissioned: March 1985 to September 1990

•Major stabilising link to Kwazulu-Natal network

•Produces ±12% of RSA supply.

SITE OPERATIONS

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PLANT STRUCTURES

Smoke stack

HV yard

Silos and fuel oil plant

Water plant east

Inclined conveyors

Cooling tower

TUTUKA FEATURES

PLANT:

FUEL: ±65% by Trucks and train per day and ±35% from NDC mine

COAL MILLS: 36 x Tube type (60t/h)

BOILERS: 6 x Benson type (MCR 17MPa @ 507kg/sec)

TURBINES: 6 x GEC Multi-Cylinder (3 000rpm at MCR 8,140kJ/Kw.h)

GENERATORS: 6 x GEC (22kV at MCR 609 MW)

TRANSFORMERS: 6 x Siemens (700MVA)

CONTROLS: Upgrade to ABB DCS Telepim XP (Replace ACS Siemens)

ESP’S: 6 x Lurgi Vertical plate type

CHIMNEYS: 2 x windshields with 3 flues each (Height: 275m)

COOLING TOWERS: 6 x Hyperbolic natural draft type (13,8 m3/sec)

COOLING PUMPS: 12 x GEC at 82 m3/sec

PROCESS

• Coal transported from stockyard via two conveyor belts to

six silos.

• Each silo is dedicated to a unit.

• From the silos coal is fed to bunkers at a unit (six mills).

• Milled coal then sent to the boilers (furnace).

• On initial ignition, fuel oil is used to begin the

combustion process.

• Thereafter mills provide fuel (PF) to continue

combustion process.

• Demineralised water at the water treatment plant is fed to

the boiler.

• Fire boiler heats up the tubes with water and steam is formed.

• Superheated steam enters turbine and via different stages

rotates turbine to a desired 3000 rpm.

• After the steam has passed over the turbine blades it

collects in the condenser.

• Cooling water is passed through the condenser in tubes,

cooling down the steam back to liquid.

• This liquid is then sent back to the boiler to be part of the

combustion process.

• The generator is connected to the turbine, as the turbine

turns so does the generator.

• The rotor is externally charged and as it rotates within the

stator, its magnetic field induces current into the stator .

• This induced current and the resistance of the stator

windings then generate the rated electricity.

• Electricity from the generator is stepped up via a transformer

for transportation on the transmission network.

• The PF burnt in the boiler produces coarse ash and fly ash.

• This ash follows the gas stream from the boiler and enters

the precipitators.

• The ash particles are electrically charged, collected and

discharged into hoppers.

• After being conditioned it is then transported on a conveyor

system to the ash disposal facility.

• Fly ash not collected in the precipitators is emitted through

the smoke stacks.

• Coarse ash falls to the bottom of the boiler into a Submersible

Scraper Conveyor (SSC).

• Transported via an ash conveying system onto the same

conveyor system as the fly ash to the ash disposal facility.

• Cooling water is continuously circulated through these

pieces of equipment cooling them down, using either direct

or indirect heat transfer technologies.

• Hot/warm water from the equipment is sent to the cooling

towers as part of the circulation process.

• The cooling towers act like a car’s radiator and cool down

this water, which is then collected in ponds and sent back

into the cooling water circuit.

• Note many overseas power stations are just machines with

no real building components and cladding.

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PROCESS FLOW

DIAGRAM OF MAIN PLANT

VALUATION APPROACHES

During 2003 when the Rates Act was about to be promulgated

Eskom appointed Adv SJ Grobler (SC) to advise them on

the interpretation of the rates legislation for the valuation of

a power station. At the time we were engaged, Merz and

McLellan (Pty) Ltd and Standard Bank of South Africa Ltd

were appointed onto the advisory team. Standard Bank did

an analysis of EBIDTAR generated for the application of a

possible profits approach.

Merz and McLellan (Pty) Ltd is a consulting engineering

company which has specialised knowledge of power stations.

They did a detailed cost breakdown analysis of Majuba Power

Station, to understand which component of the power station

is rateable from a cost perspective. This cost analysis was

modelled on Kriel and Matla power stations.

The Act does not instruct a particular approach, but requires

an approach which will represent market value.

MARKET dATA APPROACH

No comparables available.

Use value deductions of other stations as benchmarks.

INCOME APPROACH (COAL STATIONS)

No rental figure available – only for an alternative use for

industrial purposes.

Profits method – power stations have limited profitability.

It is furthermore difficult to employ considering the small

building component, ie rateable component ±0.6% of total

build cost.

% of EBITDAR contributable to buildings negligible.

COST APPROACH

The team concluded that the cost approach is the only

feasible methodology, but with consideration of case law.

CASE LAW ANd COST APPROACH

Appellate Division of Blue Circle Limited v Valuation Appeal

Board, Lichtenburg, 1991 (2) SA 772 (AD). At 792 the following

findings are made:

The influence of machinery on the value of the property

can be classified as:

1. the value of the machinery itself; and

2. the indirect influence of the machinery on the value

of the property.

A fictional state of affairs must be imagined or

assumed, namely that there is no (immovable)

machinery on the site. Only in this way can the value

accruing to the land by reason of the presence of

the machinery be ignored.

CASE LAW INTERPRETATION

• Beneficial design of improvements to accommodate

specialised machinery should not be taken into account,

unless such design will also accommodate an alternative

use.

• The more specialised a building to accommodate machinery,

the greater the diminishing impact it will have on the

improved value of the property.

• The valuer therefore has to undertake the intellectual exercise

of envisaging the improvements without any machinery and

then to proceed and determine a value.

• The Court stated that this may result that in some cases the

improvements may have a nil value.

• An alternative highest and best use scenario should

therefore apply.

ALTERNATIVE USE INCOME APPROACH

The highest and best alternative use of the power station is

that of industrial and storage space with an office component.

Research achievable rental levels for this space in the open

market, and determine a potential rental income the premises

could generate annually and capitalise the net income.

dRV APPROACHES

Alternative use depreciated replacement value. Any power

station related building will effectively be 100% obsolete.

Existing use depreciated replacement value. Will yield the

highest value, but possibly not correct value in terms of

case law.

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No. Description Construction Extent (m2) Rentable Efficiency

Rentable Extent (m²)

Rental (Rm2)

Monthly Rental

Annual Rental

B Main Station BuildingB1 Turbine House Concrete/Steel/IBR 17,203 40.00% 6,881 8.00R 55,050R 660,595R C Fly Ash Handling PlantC9 Ash Dump Office - 85.00% - 25.00R -R -R H High Voltage Yard H1 Control Room Brick 494 85.00% 420 25.00R 10,498R 125,970R H2 Electrical Workshop Brick 396 100.00% 396 15.00R 5,940R 71,280R N Fuel Oil & Lube Oil Storage PlantsN4 Daily Issue Oil Store North Brick 110 100.00% 110 15.00R 1,650R 19,800R R Maintenance Workshops & StoresR1 Maintenance Workshops & Stores Brick 11,748 100.00% 11,748 12.00R 140,976R 1,691,712R V Staff GeneralV1 Administration Office Block Concrete 1,197 85.00% 1,017 40.00R 40,698R 488,376R V2 Fire and Fist Aid Centre Brick 736 85.00% 626 35.00R 21,896R 262,752R V12 ToiletsV12.5Southern Terrace West Brick 100 85.00% 85 30.00R 2,550R 30,600R Total 78,519 46,053 651,499R 7,817,983R Minus Vacancy Provision 25.0% 1,954,496R Potential Gross Income 5,863,487R Estimated Expenditure 22.7%Rates & Taxes 200,000R Management 5.0% 293,174R Sundries 1.89R 57,500R 1,776,211R Potential Net Income 4,087,276R Capitalised 15.0% 27,248,506R Market Value for Rating Purposes (Alternative Use Income) Say 27,250,000R

Market Value for Rating Purposes (Alternative Use Income) (total civils extent 435,730m²)(extract only)

Alternative Use Depreciated Replacement Value 50 years

Approximate Age 21.08 years

Straight Line Depreciation of Power Station 42.17%

No. Description Status Constr. Extent (m2) Rate/m2 ENRC Dep. DRV

B Main Station Building

B1 Turbine House Cov. Production Plant Con./Steel/IBR 17,203 4,250R 38,400,000R 95.00% -R

E Water Treatment Plant South

E1 Water Treatment Plant Cov. Production Plant Concrete 3,120 4,000R 12,480,000R 100.00% -R

H High Voltage Yard

H1 Control Room Cov. Production Plant Brick 494 3,500R 1,729,000R 85.00% 259,350R

H3 High Voltage Yard Open Production Plant No Building 73,000 19R 1,387,000R 100.00% -R

J Main Transformers

J1 Generator Transformer Yards Open Production Plant No Building 5,436 13R 70,668R 100.00% -R

R Maintenance Workshops & Stores

R1 Maintenance Workshops & Stores Non-Production Plant Brick 11,748 3,250R 38,181,000R 85.00% 5,727,150R

V Staff General

V1 Administration Office Block Non-Production Plant Concrete 1,197 4,750R 5,685,750R 85.00% 852,863R

V12.5Southern Terrace West Non-Production Plant Brick 100 4,000R 400,000R 85.00% 60,000R

Total Improvements 463,452 812,145,374R 18,278,550R

Site Value 4,419.5905 ha -R

DRV for Rating Purposes 18,278,550R

Alternative Use DRV Say 18,280,000R

Alternative Use Depreciated Replacement Value (extract only)

C o mmi s s i o n i n g L i fe s p a n E s t . : D e c o mmi s i o n i n g D a t e A r o u n d 5 0 ye a rsA p p r o x i ma t e A g e 2 1.0 8 ye a rsS t r a i g h t L i n e D e p r e c i a t i o n o f P o w e r S t a t i o n4 2 .17 %No .

D e s c r i p t i o n B l d g . / P l a n t C o n s .

E x t e n t (m²)

E N R C B l d g . C i v i l

C o mp . %

D e p . B l d g . C i v i l C o mp .

P l a n t C i v i l C o s t

C o mp . %

D e p . P l a n t C i v i l C o s t

C o mp .

T o t a l D R V C o s t P l a n t & B l d g .

C i v i l s

A C o a l H a n d l i n g P l a n tA 1 S tora g e S ilos (x6 ) 1,0 8 0 5 ,13 0 ,0 0 0R 0 .0 0 % -R 10 0 .0 0 % 2 ,9 6 6 ,9 0 3R 2 ,9 6 6 ,9 0 3R A 2 D rive & T ra nsfe r H ouse s 1,12 5 5 ,3 4 3 ,7 5 0R 0 .0 0 % -R 10 0 .0 0 % 3 ,0 9 0 ,5 2 4R 3 ,0 9 0 ,5 2 4R B M a i n S t a t i o n B u i l d i n gB 1 T urbine H ouse 17 ,2 0 3 7 3 ,112 ,7 5 0R 4 0 .0 0 % 16 ,9 13 ,7 16R 6 0 .0 0 % 2 5 ,3 7 0 ,5 7 5R 4 2 ,2 8 4 ,2 9 1R B 2 B oile r H ouse 2 7 ,8 4 0 9 7 ,4 4 0 ,0 0 0R 4 0 .0 0 % 2 2 ,5 4 1,5 2 0R 6 0 .0 0 % 3 3 ,8 12 ,2 8 0R 5 6 ,3 5 3 ,8 0 0R C F l y A s h H a n d l i n g P l a n tC 1 P re c ip ita tors (x6 ) 9 ,6 0 0 3 8 ,4 0 0 ,0 0 0R 0 .0 0 % -R 10 0 .0 0 % 2 2 ,2 0 8 ,3 9 4R 2 2 ,2 0 8 ,3 9 4R K S t a n d b y D i e s e l G e n e r a t o r sK 1 S ta tion D ie se l G e ne ra tor R oom 2 2 1 7 7 3 ,5 0 0R 8 0 .0 0 % 3 5 7 ,8 7 9R 2 0 .0 0 % 8 9 ,4 7 0R 4 4 7 ,3 4 9R M G e n e r a t o r C o o l i n gM1 H ydrog e n G e ne ra ting P la nt 16 0 5 6 0 ,0 0 0R 0 .0 0 % -R 10 0 .0 0 % 3 2 3 ,8 7 2R 3 2 3 ,8 7 2R R M a i n t e n a n c e W o r k s h o p s & S t o r e sR 1 Ma inte na nc e Workshops & S tore s 11,7 4 8 2 6 ,4 3 3 ,0 0 0R 10 0 .0 0 % 15 ,2 8 7 ,3 5 6R 0 .0 0 % -R 15 ,2 8 7 ,3 5 6R V 12 T o i l e t sV 12 .5S outhe rn T e rra c e We st 10 0 4 0 0 ,0 0 0R 10 0 .0 0 % 2 3 1,3 3 7R 0 .0 0 % -R 2 3 1,3 3 7R T o t a l V a l u e o f B l d g s . / P l a n t 4 3 5 , 7 3 0 7 3 6 , 6 2 5 , 6 2 4R 9 4 , 5 0 4 , 17 8R 3 3 1, 5 18 , 5 3 7R 4 2 6 , 0 2 2 , 7 15R S ite V a lue 4 ,4 19 .5 9 0 5 2 ,5 0 0R 11,0 4 8 ,9 7 6R D R V for R a ting P urpose s 10 5 ,5 5 3 ,15 4R E x i s t i n g U s e D R V 10 5 , 5 5 0 , 0 0 0R Me dupi Ne w C onstruc tion C ost E stima te 6 9 ,10 0 ,0 0 0 ,0 0 0R Minus H ig he r E nvironme nta l R e quire me nts 14 ,0 0 0 ,0 0 0 ,0 0 0R C ompa ra tive C ost a t E nvironme nta l L e ve lT utuka 5 5 ,10 0 ,0 0 0 ,0 0 0R

Me dupi P ropose d G e ne ra ting C a pa c ity 4 ,7 8 8 Me dupi C ost pe r MW (e xc l. h ig he r e nvironme nta l re quire me nt) 11,5 0 7 ,9 3 7R G e ne ra ting C a pa c ity (MW) T utuka 3 ,6 5 4 E NR C (a t e xis ting e nvironme nta l le ve l)T utuka 4 2 , 0 5 0 , 0 0 0 , 0 0 0R Me rz a nd Mc L e lla n C ompa ra tive C ost S tudy of B uild ing C ivil C osts in R e la tion to T ota l C ost (0 1 J a nua ry 2 0 0 3 )Ma tla 0 .5 3 4 5 %K rie l 0 .6 9 7 2 %Me a n 0 .6 15 9 %

C urre nt E NR C C ost of a ll C ivils a t T utuka 2 5 8 ,9 6 5 ,0 5 4R S tra ig ht L ine D e pre c ia tion 4 2 .17 %D R V B ldg s . & P la nt C ivils 14 9 , 7 7 0 , 7 8 2R

K e e p in mind tha t whe n us ing this me a n a nd due to the hig h pe rc e nta g e of importe d pla nt a nd e quipme nt, with ma inly c ivil c ost loc a l c ost, the de duc e d me a n will indic a te abia s towa rds a h ig he r c urre nt c ivil fig ure

B l d g s

E x i s t i n g U s e D e p r e c i a t e d R e p l a c e me n t V a l u e (e x t r a c t o n l y )

M a i n l y P l a n t




P l a n t

TUTUKA POWER STATION (3,654MW)

Generating Capacity (MW) 3,654

Straight Line Depreciation of Power Station 42.17%

Market Value for Rating Purposes (Alternative Use Income) R27,250,000

Alternative Use DRV R18,280,000

Existing Use DRV 105,550,000

Average R50,360,000

Average of Only Alternative Use Approaches R22,770,000

Value per Depreciated MW R13,782

Value per New MW R23,830

SUMMARY OF VALUES

24 25

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Power Station

MW Output

First Unit Synchronized / Completed

Last Unit / Synchronized / Completed

Average Commencement Date

Commissioning Lifespan Est.

Years: Decommisioning

Date Around

Approx. Age in

Years At

Dep. Factor

Comparative ENRC

Municipality Year of Municipal Valuation

Municipal Valuation

Value per Dep. MW

Rate

Arnot 2,160 21-Sep-71 04-Aug-75 27-Aug-73 28-Aug-23 35.35 70.7% 106,686,113R Steve Tshwete 2009 25,300,000R 11,713R Duvha 3,600 18-Aug-80 22-Feb-84 21-May-82 21-May-32 26.62 53.2% 168,172,175R Emalahleni 2009 50,100,000R 13,917R Camden 1,600 12-Dec-66 24-Sep-69 03-May-68 30-May-25 41.66 83.3% 91,746,050R Msukal igwa 2010 19,800,000R 12,375R Grootvlei 1,100 01-Jul -75 30-Jun-25 37.51 75.0% 125,485,555R Dipal i seng 2013 27,200,000R 24,727R Hendrina 2,000 12-May-70 23-Dec-76 01-Sep-73 02-Sep-23 38.33 76.7% 178,852,400R Steve Tshwete 2012 40,000,000R 20,000R Kendal 4,116 01-Oct-88 10-Dec-93 07-May-91 06-May-41 17.66 35.3% 154,354,150R Emalahleni 2009 56,100,000R 13,630R Komati 1,000 06-Nov-61 24-Mar-66 14-Jan-64 14-Jan-14 47.96 95.9% 84,426,700R Steve Tshwete 2012 20,000,000R 20,000R Kriel 3,000 06-May-76 17-Nov-79 10-Feb-78 10-Feb-28 30.89 61.8% 117,516,350R Emalahleni 2009 28,600,000R 9,533R Majuba 4,110 01-Apr-96 01-Apr-01 01-Oct-98 30-Sep-48 10.25 20.5% 154,709,900R Pixley Ka Seme 2009 61,100,000R 14,866R Matimba 3,990 27-Jul -87 23-Aug-91 09-Aug-89 09-Aug-39 22.40 44.8% 324,655,292R Lephala le 2012 150,000,000R 37,594R Matla 3,600 29-Sep-79 21-Jul -83 24-Aug-81 25-Aug-31 27.36 54.7% 178,852,400R Emalahleni 2009 53,300,000R 14,806R Ave. Al l 3,123 30.54 61.1% 153,223,371R 48,318,182R 23,205R Ave. 2009 3,431 24.69 49.4% 146,715,181R 45,750,000R 13,077R Tutuka 3,654 01-Jun-85 04-Jun-90 02-Dec-87 02-Dec-37 21.08 42.2% 163,404,900R Lekwa 2009 50,360,000R 13,782R

SUMMARY OF MUNICIPAL VALUATIONS OF ESKOM POWER STATIONS

Saul du Toit

Farminfo: an aid for farm valuations

INTROdUCTION

Farminfo (www.farminfo.co.za) provides spatial and

descriptive information about the location and land quality of

farms in South Africa. The map on Farminfo allows easy and

quick identification of the locations of selected farms. The

farm boundaries of a subject property can be related to a

number of transaction properties in the vicinity using satellite

imagery and other map information for orientation.

USER FRIENdLY INFORMATION SYSTEM

Farminfo was developed for users who are not familiar with

Geographic Information System (GIS) software. To locate a

selected cadastral unit the user only needs to specify the

relevant registration division, farm and portion number, guided

by easy-to-use drop down lists. Access to a detailed report

containing background information of a particular cadastral

unit is gained by a click of a button.

LOCATION INFORMATION

Registered Farminfo users can locate a farm by providing

its coordinates or by using the search function. The search

function lets the user select the relevant deeds office

registration division where the particular farm is located from

a drop down list. The user is then prompted for the farm

David Jansen van Vuuren of Specialised Valuers addressed the members on ‘Valuing real estate in Mozambique: a case of input

availability uncertainty’ – we hope to write this up in the next issue of The South African Valuer.

The last speaker of the day was Professor Theo Kleynhans of Stellenbosch University who discussed ‘FarmInfo – a useful tool’.

Prof Kleynhans sent this summary.

number and the portion number to be selected from a drop

down list of all the portion numbers of that farm. The Find

button will show a map of the farm’s boundaries in relation to

other properties. The user can choose to show the boundaries

of selected farms in relation to topographical information,

satellite imagery or a combination of these.

The user can manipulate the map (eg zoom and pan) and

use the ‘zoom to all functions’ to see the locations of all the

selected farms on the screen in relation to one another, but

also to nearby towns, roads, mountains and water bodies.

For instance, by using this information a valuer can quickly

judge the comparability of the subject property (eg an irrigated

fruit farm in a mountainous area) with a number of transaction

properties (eg to other similar fruit farms or farms focusing on

dryland grain and grazing in the same area). The boundaries

of the selected farms can be overlaid on a satellite image or a

topographical map for interpretation.

The coordinates of the farms can also be extracted to help the

valuer during field visits. Other locational indicators include

distance to the nearest town, city, airport, main road, ocean

and power line.

LANd QUALITY INFORMATION

The spatial information provided for residential properties by

some websites is usually adequate for valuations. For farm

properties valuers require land quality indicators to compare

the subject property with transaction properties. The Farminfo

report provides a number of such indicators in tabular form to

enable easy comparison of farms. These include:

(a) Climate indicators

(1) Rainfall

• Mean annual rainfall

• Mean monthly rainfall

(2) Temperature

• Mean annual temperature

• Mean monthly temperature

• Monthly minimum temperature

• Monthly maximum temperature

• Heat units

• Chill units

• Number of frost days

(3) Evapotranspiration

• Total annual potential evapotranspiration

• Monthly potential evapotranspiration

(b) Terrain indicator (20m interval contour map)

(c) Soil quality indicator (land quality index)

The subject area will determine the relevance of a particular

temperature indicator, eg chill units are of major importance

for deciduous fruit farmers or for wine farmers interested in

producing premium wines. Heat units are important in areas

where farmers strive for maximum yield per hectare, such as in

the distilling wine areas. The land quality index was developed

as an indicator of soil suitability based on the requirements for

perennial crop production. It enables Farminfo users to do

a comparison of the soil suitability of farming units in South

Africa. The index is particularly useful for comparing relative

soil suitability between selected farms and to distinguish the

location of highly suitable soil from those with low suitability.

Land quality index (LQI) values above 70 suggest that a

property has soils that are rated as having a very high

suitability for the production of perennial crops. Usually such

values are associated with soils that have specific properties in

terms of drainage class, depth, texture, etc (excluding natural

fertility) required for growing of perennial crops. A LQI of eg

below 10 indicates that the soils of the property have (overall)

for all practical reasons a very low suitability (there might,

however, be small areas with higher suitability) for perennial

crop production and therefore the production capacity

(potential) of the property is rated very low, irrespective

of possibly having a suitable climate or favorable terrain

position(s).

Other useful information contained in the report includes:

grazing capacity (Ha/LSU) – the number of hectares grazing

required for carrying one large stock unit or six small

stock units year round; extent – the size of the property as

recorded by the Surveyor General; percentage cultivated –

the estimated percentage of the property that is cultivated

(or has recently been cultivated) using satellite imagery; and

number of buildings – the estimated number of buildings on

the property, as identified using satellite imagery.

The screen capture above shows two selected cadastral units

for which the location and all the land quality information is

available in the Farminfo report.

The main value of Farminfo is the easy access to location and

land quality information for the selected farm. Each portion

of each farm in South Africa is described in terms of a set

of attributes. For the example shown in the table below, one

farm was selected for each of the well-known districts that are

intensively irrigated. Through the provision of this information,

Farminfo saves the user time in his/her preparation for a

field visit and makes the user aware of potentially relevant

attributes of a selected farm.

26 27

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LOCATION OF SELECTEd FARM TZANEEN dOUGLAS VREdENdAL CITRUSdAL

Province LIMPOPO NORTHERN CAPE WESTERN CAPE WESTERN CAPE

Land quality index (LQI)% 58 34 31 22

Land types Ae259(100); Ah92(43);Ia124(57); Ae372(38);Ia192(62); Db285(21);Fb783(78);Ia201(1);

Cultivated (% of property) 61 75 84 80

Buildings - - 2 6

Vegetation SVl 3(100); AZa 4(60);NKu 3(40); AZi 1(100); FFd 2(40);SKk 7(60);

Chill units 0 330 153 399

Heat units (annual) 4189 3342 2958 3183

Frost (days) 0 20 0 0

Mean annual rainfall (mm) 638 270 141 361

Mean Jan. rainfall (mm) 94 30 0 3

Mean Feb. rainfall (mm) 83 39 0 2

Mean Mar. rainfall (mm) 67 53 3 9

Mean Apr. rainfall (mm) 35 17 8 20

Mean May rainfall (mm) 6 5 15 42

Mean Jun. rainfall (mm) 0 0 21 64

Mean Jul. rainfall (mm) 0 0 18 54

Mean Aug. rainfall (mm) 1 0 19 52

Mean Sept. rainfall (mm) 3 0 6 21

Mean Oct. rainfall (mm) 33 10 4 18

Mean Nov. rainfall (mm) 64 18 1 11

Mean Dec. rainfall (mm) 99 22 0 4

Mean annual Temp. (C) 21.49 19.07 18.11 18.70

Mean Jan. temp. (C) 25.29 26.27 21.91 24.30

Mean Feb. temp. (C) 25.29 25.58 22.51 24.50

Mean Mar. temp. (C) 24.13 23.04 21.51 22.90

Mean Apr. temp. (C) 21.99 18.65 19.21 19.70

Mean May temp. (C) 18.94 14.48 16.50 16.00

Mean Jun. temp. (C) 16.20 11.16 14.39 13.30

Mean Jul. temp. (C) 16.09 11.10 13.49 12.40

Mean Aug. temp. (C) 17.89 13.22 14.00 13.30

Mean Sept. Temp. (C) 20.64 17.18 15.80 15.60

Mean Oct. temp. (C) 22.53 20.10 17.70 18.50

Mean Nov. temp. (C) 24.03 22.90 19.61 21.20

Mean Dec. temp. (C) 24.84 24.96 20.81 23.00

Jan. Min. temp. (C) 11.90 7.60 8.51 9.40

Feb. Min. temp. (C) 13.14 6.88 8.11 8.60

Mar. Min. temp. (C) 10.69 3.30 6.41 6.50

Apr. Min. temp. (C) 6.99 -0.64 3.81 5.40

May Min. temp. (C) 3.07 -3.32 1.60 1.80

Jun. Min. temp. (C) -0.47 -5.67 0.00 0.30

Jul. Min. temp. (C) 0.79 -6.17 -0.20 -0.40

Aug. Min. temp. (C) 1.50 -5.24 0.60 1.10

Sept. Min. temp. (C) 4.04 -3.03 0.39 1.20

Oct. Min. temp. (C) 6.60 1.24 3.90 4.30

Nov. Min. temp. (C) 10.14 3.45 5.70 5.90

Dec. Min. temp. (C) 10.82 5.17 7.01 7.50

Jan. Max. temp. (C) 40.61 44.76 43.21 44.00

Feb. Max. temp. (C) 42.09 42.98 44.02 42.40

Mar. Max. temp. (C) 39.38 39.86 41.72 40.80

Apr. Max. temp. (C) 39.03 36.77 39.41 39.10

May Max. temp. (C) 37.38 32.17 36.20 34.60

Jun. Max. temp. (C) 33.34 28.21 32.40 30.40

Jul. Max. temp. (C) 32.97 27.75 32.00 29.00

Aug. Max. temp. (C) 36.87 31.70 34.90 32.50

Sept. Max. temp. (C) 39.68 37.05 38.00 36.30

Oct. Max. Temp. (C) 42.32 38.45 40.52 39.20

Nov. Max. Temp. (C) 41.91 40.15 43.31 43.40

Dec. Max. Temp. (C) 40.53 41.81 42.42 41.20

Tot. Annual Pot. Evap. (mm) 2116.45 2755.13 2585.90 2443.20

Jan. Pot. Evap. (mm) 228.50 361.33 361.00 354.00

Feb. Pot. Evap. (mm) 192.00 270.33 310.00 300.00

Mar. Pot. Evap. (mm) 186.50 226.00 271.00 261.00

Apr. Pot. Evap. (mm) 147.50 168.67 183.00 167.00

May Pot. Evap. (mm) 127.00 137.00 119.00 107.00

Jun. Pot. Evap. (mm) 108.00 101.67 87.00 74.00

Jul. Pot. Evap. (mm) 120.00 116.00 86.00 75.00

Aug. Pot. Evap. (mm) 154.00 161.00 114.00 102.00

Sep. Pot. Evap. (mm) 187.50 222.33 163.00 148.00

Oct. Pot. Evap. (mm) 212.50 285.33 239.00 224.00

Nov. Pot. Evap. (mm) 222.50 334.00 299.00 284.00

Dec. Pot. Evap. (mm) 225.00 366.00 349.00 342.00

Distance to town (km) 9.26 4.49 2.97 3.35

Distance to city (km) 101.92 116.42 247.09 160.28

Distance to airport (km) 11.38 11.35 2.35 5.91

Distance to road (km) 0.00 1.96 0.54 0.53

Distance to ocean (km) 415.34 542.11 27.76 62.42

Distance to electricity (km) 6.49 0.00 0.00 0.00

Grazing capacity (Ha/LSU) 11.56 4.91 -9999.00 -9999.00

Coordinate of farm centroid (E, S) 30.4588024688; -23.8213521771

23.6286831349; -29.1002809511

18.51677624; -31.695248016

18.9980133901; -32.5614431164

Area (Ha) 179.3810 700.6246 40.3225 28.6148

28 29

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Report with more location and

land quality information for the

selected farm

The climatic figures shown in the reports were taken from

the South African atlas of agrohydrology and -climatology

(Schulze 1997; Schulze & Maharaj 2006), which makes use

of sophisticated algorithms to model the climatic profile of

REFERENCES

Schulze, R.E. (1997). South

African atlas of agrohydrology

and -climatology. Report TT82/96.

Pretoria: Water Research

Commission.

Schulze, R.E. & Maharaj, M. 2006.

Temperature Database. In Schulze

RE (ed.) South African Atlas of

Climatology and Agrohydrology,

Pretoria: Water Research

Commission.

Prof Theo E Kleynhans MSc (Agric)

(Natal) PhD (Agric) (Stell) Professor

(Resource Economics) at Stellenbosch

University, is an agricultural economist

specialising in agricultural resource and

environmental economics, and land

valuation.

Prof Kleynhans is a professional property valuer and a full member

of the South African Institute of Valuers. He is also a director of

Stellemploy, a community employment creation institution based in

Stellenbosch.

Dr Adriaan Van Niekerk is Associate

Professor in the Department of

Geography and Environmental Studies

at Stellenbosch University. He is the

director of the Centre for Geographical

Analysis at the university. He is a

professional GISc practitioner and

carries out commissioned research

in geographical information systems (GIS) and remote sensing;

develops strategic geospatial products; provides support to

researchers and professionals who use spatial technologies

a specific farm using data from nearby weather stations and

other landscape characteristics.

For more information contact [email protected]

After the tea break the day was rounded off with an enlightening talk and demonstration by Ettiene Louw, winemaker at

Altydgedacht Wine Estate on ‘The effect of terroir (influence of climate, soil type, slope) on the quality/taste of the wine from the

same cultivar’. Afterwards everybody was invited to “come and taste the difference”.

MPRA STANDARDS WORkiNG GROUP UPDATE: JUNE 2016

V

the MPRA Technical Task Team nominated by the SACPVP met again

on 8 June 2016 for a full two-day workshop. There was no ‘messing

around’ with politics or personal agendas. The workshop was

chaired by Chris Gavor, the Valuer General. His mandate from Council was

to review the entire document, Version 7.2, with the Technical Task Team

and then present this to Council for adoption. It was proposed that these

Standards would be published in the Government Gazette to formalise

their acceptance by the profession.

The Council has agreed that a drafting specialist will be

requested to review the final draft document and to package

and format it to meet drafting conventions and standards.

The Technical Team was joined by representatives from both

the metros and the smaller municipalities to provide much

needed balance and input on their specific needs.

The purpose of the Standards is to ensure consistency in

the performance of appointed municipal valuers. There is

currently a negative perception in the market regarding the

performance of appointed municipal valuers.

It was agreed that the Standards must follow procedures for

standards development and must result in an appropriate

structure similar to other professional standards. The MPRA

Standards are principle based, not rule based. The Council is

the monitoring agency and so the resultant standards must

be enforceable by the Council. In this way the profession

will be self-regulatory and held accountable in terms of

these Standards.

It was agreed that the MPRA Standards are a starting point.

The Valuer General made it clear that the intention is to

develop future standards for other aspects of the valuation

profession.

Local municipalities are usually guided through the

business process. The municipal valuer must have a clear

understanding of the legislation. The purpose of the Standards

is not to provide a repetition of the legislation, nor to replace

it in any way. Given this premise, all verbatim extracts from

the MPRA were removed from the draft Standards. Further it

was agreed that a detailed set of practice notes/operational

guidelines to assist in the interpretation of the provisions

of the legislation would be assembled. These notes would

include guidelines on appropriate valuation methodologies to

be adopted for specialist properties, eg airports, tank storage

facilities, heritage sites, etc. The Standards themselves must

be straight forward and concise.

Lengthy discussion took place regarding the capacity of

valuers to implement the standards. This issue needs to be

re-visited and formalised.

WAY FORWARd

All the changes made to the MPRA Standards Version 7.2

were to be captured and circulated to the Task Team for

review. Certain critical inputs were required and these were

to be included in the draft version. The timeline for the

completion of the draft was the end of June 2016. As at the

end of August the MPRA Working Group has received no

further input or feedback from the Council's Technical Task

Team. The assembly of the practice notes, case law and the

various appendices was deferred to a future date.

The Technical Task Team is an effective team of specialists

who have responded well to the direct leadership and clear

directive of Chairman Chris Gavor. The workshop was

constructive and a significant amount of valuable work was

achieved. The MPRA Standards are on track and the interests

of the profession are centre square on the agenda.

30 31

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BOOk LAUNChReal Estate Valuation Theory, A Critical AppraisalBY dR MANYA M MOOYA

V

on 11 May, the South African Institute of Valuers was invited to

the launch of the book real estate Valuation Theory, A critical

Appraisal written by dr Manya M Mooya. The launch was held

at the department of Construction Economics and Management of the

University of Cape Town.

Special guests at the launch included Professor Francis

Petersen (Deputy Vice Chancellor, UCT), Professor Alison

Lewis (Dean of the EBE faculty), Professor Kathy Michell

(HoD of the the Department of Construction Economics and

Management, UCT) and Professor Robert Morrell (Director of

the Next Professoriate Programme, UCT).

The guest speaker was Mr Christopher Gavor, the

Valuer General.

The standard theory of valuation is a long-standing,

internationally accepted method of valuation to which most

valuers adhere. There are challenges to this theory, however,

as its practical application sometimes falls short in the real

world of imperfect markets and limited useable information.

The book seeks to identify and challenge shortcomings

in the current standard theory of valuation and to provide

alternatives to these shortcomings. New theory is employed

to explain major problems in real estate valuation that are

beyond the capability of the standard theory, such as price

bubbles in real estate markets, anchoring bias, client influence

and valuation under uncertain market conditions.

In Mr Gavor’s words: “Dr Manya Mooya is an outstanding

scholar and he has made an immense contribution to the

valuation profession and to South African society in general.”

Over the years Dr Mooya has developed and convened a

number of respected CPD courses in valuation presented

by UCT. He wrote the policy document on which the current

Property Valuation Act is based and which led to the

establishment of the office of the Valuer General. Dr Mooya’s

technical expertise was used to provide the correct translation,

implementation and regulatory framework of Section 23(5) of

the South African Constitution which deals with the amount

of compensation that must be paid when an organ of state

acquires property in the public interest or for a public purpose.

The book is available from Amazon.com at

approximately R1 800. Dr Mooya can be contacted at

[email protected].

BUyiNG A FARM - A VALUER’S PERSPECTiVE

V

Water is one of the three primary natural resources that determine

the potential of a farm, together with soil and climate.

Water (rain) plays a primary role in dryland production and livestock farming,

and water is at the heart of irrigation. It not only adds value directly to

the farm, but its availability increases the value of the land as well. The

availability and management of water is a complex topic, with a multitude

of variables and interested parties involved.

South Africa is a relatively dry country and water usage is strictly regulated

by law. The National Water Act (Act 36 of 1998) is the main regulator of

water use in South Africa and replaces any previous laws dealing with

water entitlement (rights). The purpose of this Water Act is to ensure that

the nation’s water resources are protected, used, developed, conserved,

managed and controlled for the benefit of all, while protecting the

environment, managing floods and drought, and meeting international

obligations.

WATER-USE ENTITLEMENT VS WATER RIGHT

A fundamental change brought about by Act 36 of 1998 is that

water no longer adheres to the property, but to a water user

(Thompson, 2006). Water ‘rights’ will eventually disappear

from title deeds. The Act stipulates that a person or legal

entity becomes a water user on registration. The registered

water-use entity receives an entitlement to use water from

the Department of Water Affairs. This entitlement allows the

holder to use water on a specific property.

The Act gave the Department of Water Affairs and Forestry

the tools to gather the information it needs for the optimal

management of the country’s water resources. The

registration of water use is one of these tools. The registration

process requires answers to four basic questions: who are

you, where are you, how much water are you using and

what are you using it for? It should be clear that water-use

registration was and is only a census and not an automatic

entitlement to use water. Verification of entitlement

should follow registration and lead to the issuing of a

water-use licence.

The numbered certificate issued after registration gives

information about the volume of water used, the source, the

farm on which it is used, the registered water user, what it is

used for and the type of registration. Unless already replaced

by a water-use licence, this registration certificate is the only

official document the user has to indicate what the eventual

water entitlement could be.

A serious consequence has resulted from the issuing of water-

use licences when less water is allocated than was previously

used, and initially ‘registered’. There could be several reasons

for this, the main reason usually being a shortage of water

in the area, and the resultant lower allocation given. This

could have a detrimental effect on a farm’s value, as higher

valued irrigation land then becomes normal dry land, whether

actually irrigated or not. This, in turn, can have serious

negative consequences for financial institutions and their

loan-to-value conditions.

CATEGORIES OF WATER USE ACCORdING TO THE ACT

Section 21 of the Water Act makes provision for eleven

categories of water use, of which the following three are

directly applicable to the farmer and important to a valuer:

1. Taking water from a water source

This registration shows the actual water in cubic metres per

Dr Mooya (left)

hands a copy of his

book to Christopher

Gavor (right)

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annum that the water user takes from a water source to use

for irrigation. It also shows the specific source, for example

dams, rivers, streams, boreholes, fountains, etc.

2. Storing water

This registration is just what it says. It entitles the water user

to store the water, after which it can be used when it suits

the user. The water volume mentioned on the storing water

registration is not added to the ‘taking water from’ entitlement

and therefore it is also not added to the hectares that may be

irrigated.

3. Stream-flow reduction

This registration replaces the forestry permits previously

required for plantations.

Plantations use more water than the natural vegetation,

and the expansion of plantations is controlled by means of

stream-flow reduction certificates.

IRRIGATION FARM TERMINOLOGY

When valuing the irrigation component of a farm, it is

important to distinguish between different types of so-called

‘irrigable land’.

• WATER-USE ENTITLEMENT refers to the lawful use of

water for irrigation purposes. It is represented by a water-

use registration that will eventually be replaced by a water-

use licence.

• IRRIGATION LANd is land that is debushed, cultivated,

equipped with mainlines and for which there IS enough

lawful irrigation water available for annual irrigation. It

has the highest value of all the irrigable land components.

• EQUIPPEd LANd is land that is debushed, cultivated,

equipped with mainlines and for which there IS NOT

enough lawful irrigation water available for the land to

be irrigated annually, but that can be used in crop rotation.

It has a lower value than irrigation land, but higher than

irrigable land.

• POTENTIALLY IRRIGABLE dRYLANd is land that is

debushed, cultivated, NOT equipped with mainlines, but

that can be equipped and for which there IS sufficient

irrigation water for the land to be irrigated annually if it

is equipped. It has a lower value than equipped land, but

higher than dryland and potentially irrigable veld.

• POTENTIALLY IRRIGABLE VELd is land that is currently

veld, not debushed, not cultivated, not equipped, but

that can be irrigated if prepared and equipped and for

which there IS enough irrigation water for the land to be

cultivated annually. It has a lower value than potentially

irrigable land, but a higher value than veld.

THE TRANSFER OF WATER-USE ALLOCATIONS

Transfer of water allocations is allowed by law (the Water Act).

This usually happens when a farm is transferred from one

owner to the next, but allocations can also be sold for other

purposes or for use on another property. This is possible

because the water adheres to the person or user and no

longer to the land. The entitlement was originally granted to

be used on a specific portion of land. These transfers are

highly controlled and regulated by the Department of Water

Affairs.

A transaction of water-use allocation or water surrendering

may take place under the following circumstances (South

Africa, Act 36, 1998):

1. The transfer must be in respect of water-use entitlements

from the same water source (irrigation scheme, river, etc).

2. It must be physically possible.

3. The water-use entitlement must be lawful according to

the Act.

THE VALUE OF IRRIGATION LANd

The value of irrigation land is largely influenced by

• IRRIGATION TYPE

The cost of preparing lands for different types of irrigation

differs and influences the value a buyer attaches to such land.

Some examples of irrigation are flood-, centre-pivot-, drip-,

sprinkler-, micro-jet, swivel boom-, canon sprayer-, wheel-

move-, dragline irrigation, etc.

• SOIL POTENTIAL

Soil potential influences not only the value of dryland, it does

the same for irrigation land. Better dryland soils always make

better irrigation lands. Well-drained soils allow for optimum

irrigation, whereas poorly drained soils make irrigation

scheduling difficult. Tree crops, orchards and vineyards

should never be planted on poorly drained soils. Nutrient

levels always play a role in the value of soils because it is

costly to rectify them. It is common sense to pay less for

soils with a low pH level, provided it is what the specific

plants need.

• CLIMATE

The influence of climate lies in the restrictions it places on

what can be planted and when.

• NORTH OR SOUTH-FACING

The temperature of soils on the north-facing slope of a hill

or mountain is always higher than on the southern slope.

This becomes important for the production of vegetables

especially for fresh markets early in the season. The rows in

most orchards run north-south and lands that can be planted

in this direction are better suited to orchards than lands that

are elongated in an east-west direction, and accordingly they

have higher values.

• dISTANCE FROM WATER SOURCE

Not all lands close to a water source are suitable for irrigation.

It sometimes happens that soils on one side of a river are not

suitable for irrigation; this results in lands being cultivated and

irrigated further away from the river where the soil is better. It

costs more to equip these lands, but it does not mean that the

values are higher. Cost does not equal value, and in this case

the value should be lower because of additional pumping and

mainline costs.

By Rumpff Krüger, professional valuer,

ACOM Valuers

A centre-pivot in operation in the North West province

An example of equipped rotation land. Land that

is equipped with mainlines and for which there

is not enough lawful irrigation water available to

be irrigated annually, but that can be irrigated in

crop rotation. Photo: Google Earth

Source: Farm Valuations in Practice (Pienaar, 2013)

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LEGAL BEAGLE Act 70 of 1970: Subdivision of Agricultural Land Act

V

Since valuers are occasionally called upon to value an unsubdivided

portion of ‘agricultural’ land for some or other purpose, Beagle read

with great interest the dissertation by Advocate Carlos da Silva (SC)

of the Four Arrows case that deals with the prohibition on conclusion of

sale agreements on agricultural land1.

In his conclusion, Da Silva points out that an option to

sell undivided agricultural land falls within the ambit of the

prohibition clauses of the Act, and that such an option would

be void and unenforceable. And since the Act even prohibits

the advertisement2 of an unsubdivided portion of agricultural

land for sale, not only is the conclusion of such sale

agreements prohibited, but also preliminary steps which may

be the precursor to the conclusion of a prohibited agreement

of sale.

To recap quickly on the facts of the Four Arrows3 case: Abigail

Construction (‘seller’) and Four Arrows (‘buyer’) concluded a

sale agreement in terms whereof the seller granted the buyer

an option to buy a portion of an undivided half share in a farm

portion. The agreement was concluded in anticipation of the

repeal of Act 70 of 19704 and provided that the “option to

purchase the Property granted by the Seller [Abigail] to the

Purchaser [Four Arrows] at the price and subject to the terms

and conditions hereof which option shall be exercisable by

the Purchaser at any time after the Purchaser and the Seller

succeed in obtaining the required consent to the subdivision

of the Property…”

It is interesting, but not of real relevance to us, that it appears

that the buyer paid the purchase price in advance and that the

parties envisaged the sale proceeding without any election

to purchase the property by Four Arrows, once consent of

the Minister was obtained, as no provision is made in the

contract for the repayment by Abigail of the purchase price

in the event of Four Arrows choosing not to exercise the

‘option’. What was intended by the parties therefore does not

qualify as an ‘option’.

Despite the fact that what was granted in terms of this

agreement was not an option, but rather a suspensive

condition, matters not as both are prohibited in terms of

the Act. Based on this case, as well as the Geue5 case, the

legal position as to the illegality of the sale or alienation of an

unsubdivided portion of agricultural land is now clear. It is

prohibited.

But when is this Act applicable in practice and how does it

apply to valuers?

Section 3 of the Act prohibits certain actions regarding

agricultural land. In essence it provides that:

a. Agricultural land shall not be subdivided.

b. No undivided share in agricultural land not already held by

any person, shall vest in any person.

c. No part of any undivided share in agricultural land shall

vest in any person if such part is not already held by any

person.

d. No lease in respect of a portion of agricultural land of which

the period is ten years or longer …shall be entered into.

e. No portion of land … and/or right to such a portion shall

be sold or advertised for sale, except for the purposes of

a mine.

There are, of course, some actions that are excluded from

application of the Act in terms of section 2, namely:

i. subdivision and/or transfer of an undivided share in land or

the sale or grant of any right to any portion of agricultural

land if to the State or a statutory body;

ii. any subdivision of, or the passing of an undivided share

in any land in accordance with a testamentary disposition

or intestate succession, if the testator died before the

commencement of the Act;

iii. the passing of an undivided share in any land in accordance

with a contract entered into prior to the commencement of

the Act;

iv. any subdivision of any land in connection with which a

surveyor has completed the relevant survey and has

submitted the relevant subdivisional diagram and survey

records for examination and approval to the surveyor-

general concerned prior to the commencement of the Act;

v. the registration of a lease as referred to above which was

concluded prior to the commencement of the Subdivision

of Agricultural Amendment Act, 1974.

The possibility of any of these clauses, excluding clause (iv)

still being relied upon seems remote since almost 50 years

has passed since the promulgation of the Act. The possibility

of someone still relying on clause (iv) remains possible.

So in essence, all agricultural land, except for the exclusions

in section 2 of the Act, is subject to the prohibitions in terms

of section 3 of the Act.

‘Agricultural land’ is defined in terms of the Act and in essence

it means ‘any land’ except:

a) land situated within the area of jurisdiction of a ‘local

authority’; there is a long list of such authorities included in

the definition6 which are not relevant to this analysis;

b) land which forms part of any area subdivided in terms of

the Agricultural Holdings (Transvaal) Registration Act, 1919

or which is a township as defined in section 102(1) of the

Deeds Registries Act, 1937 but excluding a private township

as defined in section 1 of the Town Planning Ordinance,

1949 (Natal), not situated in an area of jurisdiction or a

development area referred to in paragraph (a);

c) land of which the State is owner, or which is held in trust by

the State or a Minister for any person;

d) land which the Minister by notice in the Gazette excludes

from the provisions of the Act.

The Interim Constitution of 1993 aimed to decentralise

government and in terms of the Local Government Transition

Act, 1993 (No. 209 of 1993) transitional municipalities were

introduced which replaced all the old urban and semi-

urban authorities so that almost the whole of South Africa

was included in the new municipal areas. Areas in previous

homelands falling outside of municipalities were not included.

Consequently, the introduction of ‘wall-to-wall’ municipalities

(including homelands) in terms of The Constitution of RSA,

1996, meant that areas previously falling outside of municipal

areas classified as ‘agricultural land’ in terms of the Act,

would now fall within municipal areas, thus rendering all land,

whether truly agricultural or not, to fall without the ambit of the

Act. This would have meant that municipalities would have the

final say in subdivision of land applications and Act 70 of 1970

would have no application. The problem that this could create

for national government probably prompted government to

introduce a proviso to the Act which was promulgated7 on

31 October 1995, one day after the establishment of the new

transitional councils. This clause provided that land situated

in the area of jurisdiction of a transitional council which was

classified as ‘agricultural land’, would remain classified

as such.

In Wary Holdings (Pty) Ltd v Stalwo (Pty) Ltd and Another8

the Constitutional Court had to deal with a situation where

Wary (seller) sold an unsubdivided portion of land to Salwo

(buyer) subject to a suspensive condition of sale that Wary

would get permission for the subdivision. The subject land

historically did not fall within the jurisdiction of the old

Port Elizabeth Municipality and was therefore ‘agricultural

land’. It was included into the jurisdiction of Port Elizabeth

Municipality after the first round of demarcations in 1995

and into the jurisdiction of the Nelson Mandela Metropolitan

Council (MMMC) after the second round of demarcations.

Wary applied to the municipality for subdivision in July 2004

and permission was granted subject to certain conditions

that required Wary to effect substantial improvements which

imposed on him a cost that would make the transaction

unprofitable. Stalwo refused to agree to an increased

purchase price and Wary tried to find a way out of the

contract by appealing to the provisions of the Act, stating

that the permission from the Minister which was required had

not been obtained, rendering the contract null and void. The

High Court decided in favour of Wary, which decision was

overturned by the SCA. Wary appealed to the Constitutional

Court which decided in favour of Wary by a count of eight

1 Da Silva, C (SC), The South African Valuer, May 2016.

2 Section 3(e)(i), Act 70 of 1970.

3 Four Arrows Investments 68 v Abigail Construction (20470/2014) [2015] ZASCA 121 (17 September 2015)

4 Subdivision of Agricultural Land Act Repal Act 64 of 1998. Unpromulgated.

5 Geue & another v Van der Lith & another [2003] ZAZCA 118; 2004(3) SA 333 (SCA)

6 Section 1, paragraph (a)

7 Proclamation No. R100 of 1995

8 2009 (1) SA 337 (CC)

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out of 15 judges finding against him, the vote in favour being

carried by the casting vote of the six judges.

At the heart of this case lies the division of power between

local and national government, on which the last word has

not yet been spoken. See also Johannesburg Metropolitan

Muncipality v Gauteng Development Tribunal and Others9.

However, for now, it appears that national government still

holds the power to make decisions about the subdivision of

agricultural land.

These two cases should for now provide some guidance to

valuers when requested by clients to value unsubdivided

‘agricultural land’. Land that falls within the ambit of the Act

should therefore not be valued ‘unqualified’. Generally this

means all land that fell outside of the ‘old’ municipal areas.

9 2010 (6) SA 182 CC

Derrick Griffiths

But valuers are often also requested to value undivided

shares in ‘agricultural land’ that may or may not qualify for

exclusion in terms of the Act. The valuation of undivided

shares in ‘agricultural land’ is the subject of a following article.

John Loos writes

retail property, it appears, fuelled by consumer

demand and retail sales growth that outperformed

economic growth for much of this period. A long

period of consumer strength has seen retail property being

the top performing property sector over the past twenty years.

Some may perceive the commercial property sector not to

have ‘boomed’ to the extent of the residential sector over

the past two decades, with the residential market having

experienced an extreme price growth boom prior to 2008.

Such perceptions may be true in the case of office and

industrial property, but not in the case of retail property. This

sector appears to have outperformed all other major property

sectors over the past 20 years, including the residential

market.

Taking a view of commercial property sector performance

over a 20-year period from 1996 to 2015, using IPD data,

the retail property sector appears to run far stronger than

the other major property sectors. Viewing the average

capital value per square metre by property segments, retail

property’s cumulative rise has far exceeded that of the office

and industrial segments over the past 20 years, from 1996

to 2015.

Which property sector has performed best over the past two decades?

Using 1995 as the base year, the average capital value per

square metre for retail property is estimated to have risen by

a massive 770.7% over the 20-year period 1996 to 2015.

By comparison, the industrial and warehouse sector had a far

more modest increase of 466.7%, and office space 464.5%.

Although estimates of average house price growth are not

exactly comparable, because they are done on a per unit basis

instead of a per square metre basis, it would appear that retail

property has even outperformed residential property over two

decades. Our FNB Long Term House Price Index has inflated

by a lesser 594.6%. The retail and residential segments

appeared to be running neck and neck in the last years of the

pre-2008 property boom, but following the 2008/9 recession

retail property has performed far more strongly.

In real terms, using consumer price inflation (as measured

by the PCE Deflator) to adjust for ‘general inflation’ in the

economy, retail property’s rise in average capital value per

square metre was an impressive 148.1% from 1996 to 2005,

Residential 97.9%, industrial property 61.5% and office

space 60.8%.

retail economic fundamentals over the past 20-year

period can explain a large part of retail property’s

superior performance.

The 1996 to 2015 period was a phenomenal period of strength

of the South African consumer. The size of the South African

economy, Gross Domestic Product or GDP, grew cumulatively

by 79.33% from 1996 to 2015. Over the same period, real

household disposable income grew by a faster 87.69%, an

additional boost for retailers.

A key factor contributing to disposable income outpacing

GDP growth was a dramatic reduction in interest rates from

the late 1990s to early last decade, which lowered the level

of net interest payments on household debt significantly. The

dramatically lower cost of credit not only boosted disposable

income but enabled households to take on significantly more

debt, a major portion of it for consumer spend purposes. This is

reflected in a far higher household debt-to-disposable income

ratio today, 76.6% as at the beginning of 2016, compared with

57% at the beginning of 1995.

It got even better for retailers, as the bullish household sector

cut back on its net savings rate from 1.6% of disposable

income in 1995 to a negative low of -1.3% of disposable

income net ‘dis-savings’ rate by 2013. This net ‘dis-saving’

rate has improved only marginally to -0.7% of disposable

income by 2015, still implying an extremely high propensity to

consume by South African households.

Furthermore, as the economic boom times ended in 2007/8

and a more mediocre economic growth period set in, some

Strong retail economic fundamentals explain a large part of the retail property sector’s ‘outperformance’

additional support for the consumer and thus for retailers was

received from above-inflation wage increases, driving a rising

trend in the wage bill/GDP ratio from a low of 47.6% in 2007

to 52.7 in 2015.

The cumulative effect of the above-mentioned ‘support

factors’ was a retail sector whose real sales growth noticeably

outperformed GDP growth over the past two decades,

especially for the period 2004 to 2015. Whereas cumulative

GDP growth from 1996 to 2015 was 79.33%, real retail sales

grew by a faster 95.56% over the same period.

This ‘outperformance’ by the consumer, and thus by real retail

sales growth, over the past two decades goes a long way to

explaining the retail property sector’s superior performance

compared with the other major property sectors, including, it

appears, residential property.

In short, the retail property sector has been the strongest

performer of the three major commercial property sectors over

the past 20 years from 1996 to 2015. Although IPD Commercial

Property data is not exactly comparable with our long-term

FNB House Price Index methodology, it would appear that

retail property experienced a significantly faster increase in

average capital values than the residential property sector too.

This ‘outperformance’ is not altogether surprising, given that

the growth over the past 20 years in real household disposable

income and in real household consumption expenditure have

both exceeded economic growth over the past two decades,

causing real retail sales growth to outperform the pace of

economic growth too.

Capital growth estimates net of capital expenditure over the 20-

year period also show retail property to have delivered by far the

strongest performance, at 312.7% in total from 1996 to 2015.

Industrial property was the second best performer with 139%

total capital growth net of capex, and office space 68.1%.

There is no measure available for residential property capital

growth net of capex.

The strong capital growth could be sustained over the period

because of the high level of ‘pricing power’ of shopping

centres, as reflected in the cumulative inflation rate in retail

base rentals to the tune of 536.9% over the 20-year period,

compared with 277.5% for industrial property and 275.5% for

office space.

The cumulative result of this strength in retail property’s

‘pricing power’ was that it had the top average per annum

total return of all the commercial property sectors over the

1996 to 2015 period.

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But now, questions have to be asked over the sustainability

of the ‘outperformance’ of retail property going forward, as

certain key drivers of retail’s outperformance may have to be

curtailed, notably households’ high propensity to consume

which translates into a dismal savings rate, and above inflation

wage increase which can ultimately lead to greater levels of

job shedding.

how have the various commercial property segments performed during the past two periods of weakness?

Key economic fundamentals suggest that industrial

and office property segments should have typically

been more cyclical than retail, and so they have

been. During periods of property market weakness that have

occurred in the past two decades, the retail property sector

appears to have been least prone to capital depreciation,

although the smaller retail centres have experienced some

depreciation periodically. Linked to the weaker and more

cyclical manufacturing sector, however, industrial property

had a 1998-2002 period of significant capital depreciation, as

did office space with its links to employment in the finance,

real estate and business services sector. In times of weakness,

weak CBD office property performance suggests that ‘prime’

nodes may be a better bet.

Going into an economic downturn, which typically can mean

something of a property downturn too, we look back at the

last two periods of economic and property weakness to see

which property segments weathered the storm best. Before

we do, though, we examine the major economic drivers of

each major property sector to see what we think should have

been the case.

Real retail and wholesale GVA (Gross Value Added) should

be the key economic driver of retail property performance,

manufacturing GVA should be most strongly tied to industrial

property’s fortunes, and the large finance, real estate and

business services sector is believed to be the key influencing

sector when it comes to office property demand. However,

it is not the latter’s sector’s GVA that is that important, but

rather its employment levels and growth, because it is

staffing requirements of businesses that largely drive their

office space requirements, as opposed to their output.

Examining the cumulative growth of the three key sectoral

variables shows the industrial sector’s key driver, ie

manufacturing GVA, to be the ‘weakest link’, having only

grown by 49.08% since 1996 (to 2015). The employment

numbers for the finance, real estate and business services

sector fared better with 76.26% cumulative growth. The

potentially positive impact of this growth in employment,

however, may have been curtailed in part by significant

‘densification’ of staff in the work place, along with technology-

driven reductions in the need for storage space, which has

significantly improved the use of office space.

Retail and wholesale trade, catering and accommodation

GVA’s cumulative rise of 90.2% over the period suggests

that retail property should have had the most solid growth

in demand over the period. This relatively strong long-term

growth in the retail property’s key driving economic sector

should have contributed to it being more likely to weather

a downturn well…but much also depends on the sector’s

cyclicality in the downturn.

When it comes to cyclicality, the manufacturing sector is

typically the most cyclical/volatile. Back in the property ‘soft

patch’ of the late 90s/early 2000s just prior to the boom period,

manufacturing GVA dipped into negative growth territory

twice, recording a -0.2% decline in 1998 and another dip

to -1.5% in 2003. By comparison, retail and wholesale trade

GVA bottomed at positive growth of 1.9% in 2001. During

that weak period, employment in the finance, real estate and

business services sector also dipped into negative territory to

the tune of -1.64% in 2001.

During the 2008/9 recession, it was the manufacturing sector

showing by far the most severe dip in GVA to a -10.6% decline

in 2009, while the retail and wholesale GVA and finance, real

estate and business services employment growth dipped to

less severe negatives of -1.12% and -1.11%, respectively.

However, both the manufacturing, and retail and wholesale

trade GVA growth rates recovered quickly in 2010 on the back

of huge global and domestic monetary stimulus. The finance

and real estate sector employment rate, by comparison, took

far longer, its growth only peaking three years later than the

former two sectors in 2013. Post 2009, therefore, it should

perhaps have been office space that was the underperformer.

Does the history of industry/employment performance of the

past two decades point to a greater propensity for capital

depreciation in the case of industrial and office space,

compared with a more stable retail property sector over this

period? Indeed it does appear to.

Over the period 1998 to 2002, IPD data points to significant

value decline in the areas of industrial and office property,

whereas retail property largely sailed through that weak

period more smoothly. In 1998, the year of that big interest

rate spike to prime of 25.5%, office space recorded -7.4%

capital depreciation net of capital expenditure, while

industrial property recorded -7.7% decline. Retail property,

by comparison, bottomed at a slightly positive +0.1%.

In 2009, the most recent though short-lived recession,

once again office and industrial property showed capital

depreciation (net of capital expenditure) to the tune of -1.5%

and -0.2%, respectively, while retail showed low positive

growth of +1.2%.

As vacancy rates blew out more severely in the office and

industrial sectors, pricing power of landlords appeared far

more constrained in these two sectors at the time. The result

was a decline in base rentals in both industrial and office

space at stages from 2001 and 2003, whereas retail base

rental growth remained strongly positive.

Examining the cumulative capital depreciation rates (net

of capital expenditure), as provided by IPD, for the period

1998-2002 in greater detail, however, we see that not all

retail property was exempt from capital depreciation. Over

the period, the smaller neighbourhood and community

shopping centre categories saw mild -3.5% and -2.8%

capital depreciation rates net of capital expenditure, whereas

the stronger small regional and regional centres showed

solid capital appreciation of +14.1% and +22, respectively.

Should we be surprised? In many cases it is the larger retail

centres that have in the past had the stronger ‘pulling power’

for clientele through tougher times, and perhaps the stronger

tenants on average too.

All of the major industrial property categories showed

cumulative capital depreciation through that 1998-2002

period, as did those of office space. However, perhaps a

further insight gained from examining sub-segments is the

likelihood that ‘marginal’ nodes can perform far worse than

‘prime’ nodes. We say this because IPD reported inner city

office space (with many inner cities battling decay, a notable

exception being Cape Town) as having a cumulative capital

depreciation of -36.4% from 1998 to 2002, far more extreme

than the -3% depreciation for decentralised office space.

In conclusion, over the past two periods of property weakness,

ie those of the late 90s/early 2000s and that of 2008/9, the

office and industrial property categories were more prone to

weakness and capital depreciation than was retail property.

Much of this arguably had to do with the retail and wholesale

economic sector showing stronger long-term growth than

finance, real estate and business services employment

growth, and manufacturing growth, two key macro drivers of

office and industrial property demand respectively. The latter

two macro drivers have also been more cyclical than those of

retail and wholesale GVA growth.

But the retail property sector has not been free of capital

depreciation, with smaller centres having experienced some

depreciation over the 1998-2002 period as well as in the

2008/9 recession. Bigger appears to have been better in

tougher times in retail. Then, a sharp inner city office space

capital depreciation during the 1998 to 2002 weak period

suggests to us that the prime nodes and properties weather

downturns better as a rule of thumb.

This view is perhaps best supported by viewing Rode’s

Capitalisation Rate times series for Joburg CBD A-Grade

Office Space, which showed significantly more upward

movement in the two periods of economic and property

market weakness than was the case for decentralised Joburg

office nodes. This happened both in the late 90s as well as

around the 2008/99 recession.

John Loos

Household and Property Sector Strategist:

[email protected]

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PURChASE OF ThE CAVE OF MAChPELAh By ABRAhAM – iS ThiS MARkET VALUE?

V

GENESIS 23 - THE dEATH OF SARAH

1 Sarah lived to be a hundred and twenty-seven years old.

2 She died at Kiriath Arba (that is, Hebron) in the land of Canaan,

and Abraham went to mourn for Sarah and to weep over her.

3 Then Abraham rose from beside his dead wife and spoke

to the Hittites. He said, 4 "I am an alien and a stranger among

you. Sell me some property for a burial site here so I can bury

my dead."

5 The Hittites replied to Abraham, 6 "Sir, listen to us. You are

a mighty prince among us. Bury your dead in the choicest of

our tombs. None of us will refuse you his tomb for burying

your dead."

7 Then Abraham rose and bowed down before the people

of the land, the Hittites. 8 He said to them, "If you are willing

to let me bury my dead, then listen to me and intercede with

Ephron son of Zohar on my behalf 9 so he will sell me the cave

of Machpelah, which belongs to him and is at the end of his

field. Ask him to sell it to me for the full price1 as a burial site

among you."

10 Ephron the Hittite was sitting among his people and he

replied to Abraham in the hearing of all the Hittites who had

come to the gate of his city. 11 "No, my lord," he said. "Listen

to me; I give you the field, and I give you the cave that is in it.

I give it to you in the presence of my people. Bury your dead."

12 Again Abraham bowed down before the people of the land

13 and he said to Ephron in their hearing, "Listen to me, if you

will. I will pay the price of the field. Accept it from me so I can

bury my dead there."

14 Ephron answered Abraham, 15 "Listen to me, my lord; the

land is worth four hundred shekels of silver, but what is that

between me and you2? Bury your dead."

16 Abraham agreed to Ephron's terms and weighed out for

him the price he had named in the hearing of the Hittites: four

hundred shekels of silver, according to the weight3 current

among the merchants.4

17 So Ephron's field in Machpelah near Mamre—both the

field and the cave in it, and all the trees within the borders

of the field—was deeded5 18 to Abraham as his property in

the presence of all the Hittites who had come to the gate of

the city.

19 Afterward Abraham buried his wife Sarah in the cave in

the field of Machpelah near Mamre (which is at Hebron) in

the land of Canaan. 20 So the field and the cave in it were

deeded to Abraham by the Hittites as a burial site.

1 According to translation, Abraham wished to establish an unassailable right to the land by the payment of its value.

2 “What can such a sum as that mentioned matter to persons such as we. (Hebrew text referred to “what is that betwixt me and thee”. In this apparently unconcerned

tone the seller indicates that the price he wants, 400 scekels of silver, was considered a very substantial sum, perhaps the purchasing power of $1000 - $2000 dollars in

our time. In the contemporary code of Hammurabi the wages of a working man was fixed at six to eight shekels (Bennet).

3 There was no standard size coin and thus the silver was weighed.

4 “..current among the merchants”. The phrase denoted that the silver was in convenient size pieces, readibly usable in business transactions.

5 “were deeded” or “were made sure” ie the property was assured to Abraham. This could have been an extract from the Deed of Assignment which was drawn up at

the time of purchasing. Literal text refers to similar contracts drafted in the very early Semitic times which documents have been discovered in large numbers. The term

Semites is applied to a group of peoples closely related in language, whose habitat is Asia and partly Africa. The expression is derived from the Biblical table of nations

(Genesis 10), in which most of these peoples are recorded as descendants of Noah's son Sem.

Extract prepared by Jerry Margolius

Extract from: Genesis 23 (New International Version)

PERFECTiNG ThE SECTiON 118(3) hyPOThEC

V

WHAT IS A HYPOTHEC?

A hypothec is a right afforded to a creditor in terms of our law

of credit security, which entitles the creditor to retain power

or control of a thing owned by the debtor until such time as

the obligation owed by the debtor to the creditor has been

satisfied. The manner of control of the thing, and the times at

which the creditor is entitled to exercise that control, and the

manner in which the creditor needs to assert his right to that

control, differ from one hypothec to the next. The idea behind

a hypothec is to give a creditor security for the repayment

of the loan or the satisfaction of the obligation owed to the

creditor by the debtor.

WHAT dOES 'PERFECTING' MEAN?

Perfection refers to any action that the law requires the

creditor must take in order to 'activate' its credit security right

to take possession of the debtor’s property that is subject to

the hypothec; and to sell that property to satisfy the debtor’s

obligation to the creditor. Perfection is required in most (but

not all) types of credit security arrangements. In most cases,

permission from the court is required before the creditor can

take possession of the object of security.

COMMON HYPOTHECS

COMMON LAW PLEdGES

A pledge is a hypothec in terms of which the creditor is

voluntarily put into the possession of an object of value by

the debtor, and the creditor retains possession of that object

until such time as the debt or obligation owed to the creditor

has been satisfied in full. Note that in relation to common law

pledges, physical possession of the item of security is essential.

Note further that only movable objects can be pledged in this

fashion in terms of our common law. The creditor is entitled, if

the debtor defaults, to sell the object of value that is subject

to the pledge to satisfy the debt or obligation owed to the

creditor by the debtor. In this type of hypothec, because the

debtor has voluntarily given up possession of the object of

value to the creditor and the creditor is in possession of it

already, the creditor does not need to obtain a court order

authorising the taking of possession of the object and the

sale of it to satisfy the debt. However, there are strict rules

that govern the manner in which the sale must occur, to

protect the debtor from abuse of the system by the creditor.

MORTGAGE

A mortgage is another type of hypothec in which a limited real

right is registered over an immovable property (for example

a piece of land) in favour of the creditor (who is usually the

bank), which right entitles the creditor to perfect its security

right by applying to court for an order taking possession of

the property and selling the property at auction to satisfy the

debt or obligation owed to the creditor by the debtor, if the

debtor defaults in terms of the loan agreement. Note that

mortgages can only be registered over immovable property

or certain types of rights associated with immovable property.

NOTARIAL BONdS

Another common hypothec is a pledge in terms of the Security

this article is one in a series dealing with the consequences of the

judgment handed down in the matter of city of Tshwane Metropolitan

Municipality v PJ Mitchell (38/2015) [2015] ZASCA 1 (29 January

2016) (“hereinafter referred to as Mitchell”). In this article we look at what

is required in terms of our law to 'perfect' the hypothec created in favour

of the municipality in terms of Section 118(3) of the Local Government:

Municipal Systems Act (“the Act”). In order to understand the legal

institution of perfection in terms of our credit security law, it is necessary

to first understand several general principles. For this reason hypothecs,

perfection, and notification will be discussed generally, and thereafter an

analysis of how the section 118(3) hypothec is to be understood in this

context follows.

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by Means of Movable Property Act. This type of pledge is

different from a common law pledge, and is recorded in a

notarial bond. The notarial bond is then registered in the

Deeds Office, in a manner very similar to a mortgage bond.

The aforementioned act provides that the nature of the

hypothec created is essentially the same as a pledge created

in terms of our common law, with certain crucial differences

(the most important one being that the creditor does not take

the object of security into its physical possession, but the

law deems the creditor to have done so to create a fictional

pledge). This type of hypothec is perfected by the creditor

applying to court for permission to take possession of the

object that is the subject of the notarial bond, and to sell it

to satisfy the obligation or debt owed to the creditor by the

debtor.

COMMON ELEMENTS OF HYPOTHECS

NOTIFICATION OR PUBLICATION

Firstly, in all hypothecs the creditor has to take some kind

of action that notifies the rest of the world of that creditor’s

right over the object of security. In a case of a common law

pledge the creditor takes the item of security into its physical

possession; in the case of a mortgage the creditor registers

a mortgage bond over the immovable property in question;

and in a case of notarial bond the creditor registers a notarial

bond over the movable property in question (the two bonds in

question being recorded in an office of public record that can

be accessed by any interested party). In all of these cases the

purpose of the notification by the creditor to the rest of the

world of the creditors’ right in that item is to ensure that other

creditors are not misled by the debtor into providing further

credit to the debtor based on that same item of security, and

further to ensure that the first debtor has stronger rights

to that item of security than any other creditors that might

subsequently acquire if the debtor has disingenuously held

out to other creditors that the item of security in question is

available to provide security to them.

PERFECTION

Secondly, in all cases the creditor needs to perfect its

hypothec before it is allowed to sell the property in question.

In relation to a pledge, the act of perfection occurs when the

debtor voluntarily gives possession of the property to the

creditor. In relation to mortgage bonds and notarial bonds, the

act of perfection occurs when the creditor makes application

to, and is granted an order by a court to the extent that the

creditor can take the property concerned into its possession

and sell it to satisfy the debt owed the creditor by the debtor.

This is because in our law, self-help or vigilantism is frowned

upon, and were a creditor to seize property in possession

of a debtor without either the consent of that debtor or a

court order authorising seizure, such conduct would be

unlawful even if the creditor had a security right in respect

of the property concerned. In the case of a common law

pledge the debtor has already voluntarily placed the creditor

in possession of the property concerned and so there is no

need for a court order, perfection having occurred when the

debtor voluntarily relinquished control of the property to the

creditor.

THE SECTION 118(3) HYPOTHEC

The wording of section 118(3) of the Local Government:

Municipal Systems Act 32 of 2000 provides only that a

municipality has a hypothec over the property concerned for

all charges incurred in connection with it. The Act itself is not

clear on precisely how a creditor needs to go about perfecting

its hypothec in terms of section 118. It most certainly does

not give the municipality any special rights or preferences to

exercise its hypothec in any manner other than in accordance

with the general principles of our law of credit security.

The authors are of the view that, based on the general

principles described above that apply to hypothecs in terms

of our law of credit security, a municipality needs to follow the

steps described below to exercise its hypothec:

(i) Ordinarily an attachment order is applied for and granted

only after the municipality has already obtained an order

against the person who incurred the debt for payment of

that debt. It may be possible for a municipality to apply for

an interdict on an urgent basis preventing the owner from

transferring the property to another, and attaching it in the

interim, to secure its hypothec, before obtaining judgment

against the debtor concerned, based on the ordinary court

rules. Whether our courts will grant such an order, however,

remains to be seen.

(ii) After obtaining judgment against the debtor, the

municipality needs to apply to court for an order attaching

the property burdened by the hypothec and authorising a

municipality to sell that property at auction to satisfy the

debt owed to the municipality. Logically, this would apply

at any time that the municipality choses to exercise its

rights in terms of the hypothec – regardless of whether the

property is at that time owned by the person who incurred

the debt owed to the municipality, or a subsequent owner.

(iii) Once an attachment order is granted, the municipality

would then, in the ordinary course as any other creditor

would in the circumstances, forward a copy of the court

order to the registrar of deeds in whose jurisdiction

the property is located, such that an interdict can be

registered against the property in the deeds office, which

will prevent transfer of the property to any third party

until such time as the amount owed to the municipality in

terms of the court order concerned has been paid in full.

In the authors’ view it is only when the interdict is

registered in the deeds office notifying the world at large

that the municipality has a hypothec over the property,

that the municipality has perfected its hypothec in terms

of section 118. To regard the municipality as having

perfected a hypothec before the attachment occurs

in the deeds office (ie once a court order is granted

attaching a property but without any action being taken

by the municipality to register its hypothec against

the property in the deeds office) would be to ignore

the established principles of credit security in our law.

When the municipality makes application to the court

for the attachments and sale of property concerned, the

owner of the property (who may or may not be the person

who incurred the municipal charges that the municipality

is seeking to recover by the sale of the property) will then

have the opportunity to put any defences before the court

as to why the property should not be sold to defray those

expenses. This ensures that the municipality does not take

the law into its own hands and seize the property from

the property owner without following the due process of

obtaining a court order authorising seizure.

INTERESTING OBSERVATION ON THE TERMINATION

OF HYPOTHECS

The rules that regulate hypothecs ensure that no third party

who is innocent of the debt owed by the debtor to the creditor

becomes liable for that debt when acquiring the item of

security from the debtor, unless the third party has expressly

agreed to take over the debt. In the cases of pledge, for

example, a creditor would sell the item of security in order to

satisfy the debt owed by it to the debtor, thus discharging the

debtor's debt and passing transfer of the item of security to

the purchaser thereof, free of the debt. In the case of mortgage

bonds, the mortgage bond has to be cancelled in the deeds

office before such time as the property can be transferred

to the successor in title thereof, unless the successor in

title agrees to take over the debtor's liability to the creditor

– in which case the property is transferred to the successor

entitled thereto simultaneous to either a substitution of the

debtor for the third party transferee in terms of the mortgage

bond, or the cancellation of the mortgage bond. In the case

of a notarial bond, the same principles apply as in relation to

a mortgage bond. In all of these cases the law prevents an

innocent third party who acquires the property from becoming

liable for the prior owner’s liability to the creditor – unless the

transferee agrees.

The authors thus question how the court in the Mitchell case

could have reached the conclusion that when the property

is transferred from the debtor to an innocent third party, the

hypothec could “survive transfer” and be enforced against

that innocent third party, when in terms of all (or at least most)

other hypothecs there is no provision for this unless the third

party acquiring the property expressly agrees to take on

that liability.

The authors argue that at the very least, for section 118, it

cannot reasonably be understood in terms of our law of credit

security that the hypothec should “survive transfer” and be

enforceable against an innocent third party successor in title

unless at the very least the municipality has perfected its

hypothec in the manner described above and in that manner

notified the entire world of the existence of its hypothec. A

purchaser wishing to acquire the property once the hypothec

has been perfected and an interdict has been registered

against the property for the judgment debt concerned, would

then have notice of the existence of the hypothec and the

property would not be able to be transferred to that purchaser

free of the hypothec unless that hypothec were cancelled

in the deeds office first. As the deeds office rules and

regulations require that once an interdict has been registered

against the property, it must be uplifted before the property

can be transferred to a subsequent owner, the practical

effect of the registration of the interdict (ie the perfection of

the municipality’s hypothec) would be that the municipality

would need to be paid all amounts outstanding (or agree to

a payment arrangement for same) before the interdict could

be uplifted by the deeds office and the property could be

transferred to the purchaser concerned, meaning that the

purchaser concerned would always receive the property free

of the hypothec unless the purchaser has agreed to take over

the liability.

It is conceivable that a purchaser acquiring a property

subject to a hypothec in terms of section 118 would agree

to take transfer of that property subject to the hypothec (and

accordingly subject to the municipality’s rights to attach

and sell that property to satisfy the debt owed to it by the

debtor who was not the purchaser). This could be achieved

by the purchaser expressly agreeing in the offer to purchase

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to take over the debtor’s liability to the municipality, and by

the municipality agreeing to uplift the interdict on this basis –

which would presumably only happen if the municipality had

secured some sort of guarantee or repayment plan from the

new owner in respect of the outstanding debt.

CONCLUSION

The authors are of the view that the court’s ruling in the

Mitchell and Mathabathe (*Tshwane Metropolitan Municipality

v Mathabathe 2013 (4) SA 319 (SCA) at 325) judgments did not

adequately or properly investigate the qualities of hypothecs

in terms of our law of credit security, and that this lead to the

incorrect interpretation of section 118 as creating a hypothec

in favour of a municipality that “survives transfer”. In our view,

such a hypothec should firstly not survive transfer unless the

successor in title has expressly agreed to take on the liability

to the municipality. Secondly, in our view the municipality has

not perfected its hypothec until it has notified the public at

large of the existence of the hypothec by way of registration

in the Deeds office of an interdict attaching the property in

favour of the municipality, which simultaneously prevents

transfer of that property to a successor until such time as

the debt owed to the municipality has been paid in full. This

protects both the creditor and an innocent purchaser.

Understanding and interpreting section 118 as described

in this article would bring the operation of the section 118

municipal hypothec within the ambit of the normal operation By Chantelle Gladwin, partner and Rogan Heale,

candidate attorney at Schindlers Attorneys

of hypothecs in terms of our law of credit security, and

would rationalise the principles applicable to it with all other

hypothecs that exist in terms of our law of credit security.

Interpreting section 118 in any other way is (in the authors

view) nonsensical and legally incorrect.

dISCLAIMER

Our law of credit security is rather complex, and the authors

do not intend nor purport to deal extensively with all aspects

of it referred to above. We describe the general rules for the

purposes of illustrating the principles discussed, but do not

deal with all exceptions and qualifications to these rules, as

this would unduly burden the reader. Further, for the same

reasons as above, the definitions/descriptions provided are

given to illustrate the principles involved, and are not the full

and proper legal definitions/descriptions (which are much

more involved).

ONE SMALL STEP TOWARDS REPAIRING THE HARM THAT THE MATHABATHE AND MITCHELL JUDGMENTS DID TO PROPERTy OWNERSOn 27 June 2016 the South Gauteng High Court granted an order against Ekurhuleni Municipality in the case of Gladwin v Ekurhuleni Metropolitan Municipality (14497/2016) in the following terms:

1. It is unlawful for the Respondent to have refused to restore the supply of electricity to the Applicant’s premises on the basis that amounts were owed to the Respondent by the prior owner of the premises in connection with the premises;

2. The Respondent is prohibited from disconnecting and / or preventing the supply of power to the Applicant’s premises on the basis that amounts are allegedly owed to the Respondent by the prior owner of the premises;

3. The Respondent is liable for the

costs of this application on party-party scale.

This sets a very clear precedent to the extent that a municipality is prohibited from terminating the supply

of services to a new owner, or of refusing to supply services to a new owner, on the basis of debt owed to the municipality by the old owner. This is one small step towards repairing the harm that the Mathabathe and Mitchell judgments did to property owners. Chantelle Gladwin Partner at Schindlers Attorneys, Conveyancers & Notaries

UNEqUAL BEFORE ThE LAW: CiTy OF JOhANNESBURG’S SUPPLEMENTARy ROLLS 1, 2 AND 3 TO ThE 2013 GENERAL VALUATiON

V

THE LAW BEFORE 1 JULY 2015

In terms of section 78 of the Local Government: Municipal

Property Rates Act before 1 July 2015, a consumer whose

municipal property valuation was reduced on objection,

appeal or review, was entitled to a retrospective application of

that reduced valuation back to the date of the commencement

of the supplementary valuation roll on which the valuation of

that property was argued and reduced.

THE LAW AFTER 1 JULY 2015

From 1 July 2015 onwards, however, the law was amended

to provide that a consumer who successfully argues for a

reduction of its municipal property valuation is entitled to:

(i) retrospective application of that reduced valuation from the

date of the actual reduction in valuation of the property; or

(ii) retrospective application from the date of the inception

of the general valuation roll to which the supplementary

valuation roll that the reduction in value is argued on;

which ever occurred later.

WHAT dOES THIS MEAN?

This means that consumers who obtained an objection, appeal

or review outcome indicating that their municipal property

valuation would be reduced on Supplementary Rolls 1, 2, or 3

to the City of Johannesburg’s 2013 General Valuation Roll, will

only be entitled to a retrospective application of that reduced

property valuation to the date of commencement of that

supplementary roll, and not to a retrospective application of

that reduced property valuation to the commencement date

this article canvasses the unequal (and arguably unlawful)

difference in the legal ability of consumers who have obtained a

reduction in their municipal property valuation in respect of City

of Johannesburg’s Supplementary Rolls 1, 2 and 3 to the 2013 General

Valuation Roll, to obtain a retrospective application for that relief to the

date of commencement of the 2013 General Valuation Roll, compared with

consumers who obtained a reduction in their municipal property valuation

in respect of any Supplementary Roll that commenced after these

aforementioned three rolls.

of the 2013 General Valuation Roll (which was 1 July 2013

and in all cases considerably earlier than the commencement

date of the three supplementary rolls mentioned).

Consumers who have obtained (or who will in the future obtain)

the same relief (ie a reduction of their municipal property

valuations in terms of an objection, appeal or review outcome

in respect of Supplementary Roll 4 or future supplementary

rolls to the City of Johannesburg’s 2013 General Valuation Roll)

will, however, be entitled to a retrospective application of the

reduced municipal property valuation to the commencement

date of the 2013 General Valuation Roll (being 1 July 2013),

or the date that the property value was reduced, whichever

is later.

This flows from the fact that section 78 of the Local

Government: Municipal Property Rates Act was amended

as explained above with effect from 1 July 2015, to provide

retrospective relief to 1 July 2013 (or the date that the property

value was reduced, whichever is later) only to consumers

whose municipal property valuations were reduced on

supplementary rolls that commenced after the date of change

of the law (ie 1 July 2015).

IS THIS UNEQUAL TREATMENT LAWFUL?

In terms of our law there is a presumption that a change in

legislation applies only going forward, and not retrospectively,

unless the legislation that is changing expressly provides for

retrospective application (which in this particular case it does not).

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hOW TO SPOT A GOOD PROPERTy VALUER?

V

A SHORT HISTORY

The methodology for property valuation changed dramatically

since the International Association of Assessing Officers

(IAAO) first organised themselves as a professional group in

1934 – the time of one of the deepest recessions in history.

As far back as 28 March 1874, however, a ground-breaking

paper discoursing methods of property valuation for land tax

purposes was presented to the Social Science Association of

Philadelphia (Pennsylvania, USA). The paper proposed that

customary procedures be established to “arrive at methods

for the just and equal distribution of local tax structures”

(Cochran, 1874). What may be the first book written on the

subject of property valuation (Hurd, R.M. 1903, The rise of

urban America, New York) was authored by a residential

funding company executive after searching in vain for such a

book in both the UK and the USA.

The need for property valuation has existed internationally,

mainly in the USA since the 19th century, but it wasn’t until the

late 19th and early 20th centuries that professional valuers (or

appraisers, as they are referred to in the northern hemisphere)

began to analyse the scientific methodology and procedure

behind property valuation. At the same time, valuers began

to explore the most consistent elements of identifying and

authenticating property value. These endeavours led to the

development of specific methodologies, and eventually even

computerised valuation models (and smart phone apps), that

today help ensure that property valuation is performed in a

fair, efficient, and accurate manner.

Nowadays it is quite a challenge to become a professional

property valuer. The process demands huge persistence and

commitment that is concluded when you finally pass your

SACPVP (the South African Council for the Property Valuer

Profession) examination.

As is the case with any profession, not all people in a specific

profession have the public’s interests at heart. Professionals,

mostly, sell their advice, knowledge, insight or expertise to

their clients. They do sometimes, however, let their clients

down.

This is why we should acquaint ourselves with the qualities of

the good valuer in order to ensure the best service, advice and

professional support when in need of a top-quality valuation

report – something that can stand the test of time.

So what are the characteristics or inherent qualities of a good

valuer? (The use of ‘he’ includes ‘she’.)

• A good valuer is a ‘nice’ and honest person – he is honourable

• He familiarises himself with new information about trends

and tendencies (and market realities) before he jumps to

unfounded conclusions.

• He justly asks for help when a certain valuation is too

onerous, or he declines politely not to pursue the valuation

on his own.

• He checks contracts and agreements in order to understand

the status quo of a property’s commercial pedigree.

• He is always on the hunt for new and more clarifying

information – he knows the importance of trends, tendencies

and predispositions.

• He provides a good audience – he listens and allows people

to talk.

• He always considers new ideas and innovative solutions.

• He is probing and inquisitive – he is a student of the

profession.

• He is dedicated to a career – he does not just eke out a

functionality.

• He is flexible, adjustable and responsive to changed

circumstances and demanding situations.

• He is independent but not detached from professional

advice and peer judgement.

• He is intellectually endowed (smart) and will be able to

separate the wheat from the chaff – he has a reliable gut

feeling.

• He is creative and resourceful.

• He is impartial and unprejudiced, and will (should) not be

influenced by clients.

• He hunts the real value of a property – he isn’t just looking

for transaction confirmations.

• He’s human and he realises that he will never produce

the flawless report – he’s therefore in perpetual pursuit of

another piece of enlightening evidence.

• He’s not an accountant (with all due respect to accountants)

This means that until such time as a court declares the

situation to be unlawful and makes an order remedying it, we

can expect municipalities to comply with the ‘letter of the law’

as it stands (or rather as it stood prior to 1 July 2015).

This essentially means that all consumers who obtained a

reduction in their municipal property valuation flowing from

a successful objection, appeal or review in relation to any

supplementary roll that commenced before 1 July 2015

should not expect to have their reduced municipal property

valuation applied further back than the commencement date

of the supplementary roll concerned.

As above, until a decision is made by a court declaring this

to be unlawful – because it is irrational to treat consumers

seeking the same relief after 1 July 2015 in a manner different

By Chantelle Gladwin, partner and

Tenielle Combrink, candidate attorney at

Schindlers Attorneys

from those who have already sought and obtained relief prior

to 1 July 2015 – this conduct will be considered lawful.

In the authors’ opinion, consumers who are significantly

financially prejudiced as a result of this irrational situation

should approach the courts for relief, and a court should

logically grant it to them.

DEFAULTiNG TENANTSV

“Some landlords may find themselves in the situation where

their tenant is no longer able to pay their monthly rent; landlords

cannot simply evict the tenant as tenants are protected by the

Prevention of Illegal Eviction from Unlawful Occupation of Land

Act, No. 19 of 1998, also known as the PIE Act,” says Goslett.

“Essentially the act applies to the occupation of premises which

constitute a dwelling, which in the case of a landlord and tenant

relationship would be the residential property in an urban area.

The reason that the act was introduced was to ensure that tenants

were protected from being unlawfully evicted from the property.

However, it is important to note that while the act aims to prevent

wrongful eviction, it does not mean that the tenant cannot be

evicted, merely that the correct procedure needs to be adhered

to during the process.”

Goslett says that it is imperative that any homeowner or investor

who wishes to let out a property should familiarise themselves

with the PIE Act, along with the numerous procedures it

advocates for the lawful dealing of a defaulting tenant. “While

the act was created with the tenant’s protection in mind, it is not

prejudice against landlords, but ensures that the eviction process

the current challenging economic circumstances have not only had

an effect on those wanting to own property, it has also impacted

on many tenants and landlords within the residential market, says

Adrian Goslett, regional director and CEO of RE/MAX of Southern Africa.

is followed in the correct manner according to legislation and that

tenants are treated with respect,” he explains.

According to the PIE Act, in order to evict a tenant lawfully, landlords

have to adhere to the following process:

If by failing to pay the agreed rental amount, the tenant has breached

the lease agreement, the first step is for the landlord to send notice

to the tenant informing him of such breach, referring specifically

to the breach clause stated in the agreement. “This emphasises

the importance of ensuring that all lease agreements with tenants

meet legislative requirements and include the necessary clauses

providing them with protection. The more detailed the lease

agreement, the better for both parties,” says Goslett.

He advises that the lease agreement needs to fall in line with the

Consumer Protection Act (CPA) in that, regardless of the time period

stipulated by the breach clause, the landlord is required by the CPA

to give at least 20 business days’ notice to the tenant to allow them

to rectify the breach before the agreement is cancelled, provided

the tenant does not remedy the breach within the given time frame.

continued on page 60

48 49

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THE SOUTH AFRICAN


Jannie Wessels is co-principal of

Seeff Commercial in Sandton, has a

masters degree in Land and Property

Development Management (MLPM) from

UFS and is a professional associated

valuer. He performs valuations and

has created his relationships under

the EnviroDimensions brand (www.

envirodimensions.co.za)

RATES CLEARANCE ExPLAiNEDV

WHAT IS A RATES CLEARANCE CERTIFICATE (RCC)?

A rates clearance is a certificate provided by the relevant local

authority on application by a conveyancer to transfer a property.

This document certifies that there is no current outstanding debt

due by the seller on the property. The Registrar of Deeds may then

pass transfer on the property and registration in the purchaser’s

name may go ahead.

HOW dOES THE RATES CLEARANCE PROCESS WORK?

The appointed conveyancer will apply to the relevant local

authority to issue the “rates clearance figures”. These figures

are a breakdown of the outstanding debts. The conveyancer

will request this outstanding amount from the seller. Once all

outstanding and assessment amounts have been paid by the

seller a Rates Clearance Certificate will be issued to the purchaser.

WHAT IS THE LAW?

The Deeds Registry Act prohibits the Registrar from passing

transfer of a property without a Rates Clearance Certificate.

Section 118 of the Local Government: Municipal Systems Act,

2000 (Act No. 32 of 2000) states:

118(1) A registrar of deeds may not register the transfer of property

except on production of a prescribed certificate –

(a) issued by the municipality or municipalities in which that

property is situated; and

(b) which certifies that all amounts that became due in connection

with that property for municipal service fees, surcharges on

fees, property rates and other municipal taxes, levies and

duties during the two years preceding the date of application

for the certificate have been fully paid.

1(A) A prescribed certificate issued by a municipality in terms of

subsection (1) is valid for a period of 60 days from the date it has

been issued.

IS A RATES CLEARANCE REQUIREd ON BOTH FREEHOLd

ANd SECTIONAL TITLE PROPERTIES?

To understand fully the differences between sectional title and

traditional freehold property ownership it is important to define them.

Freehold or full title describes the transfer of full ownership

rights of a property, including both the building and the land.

Freehold title includes amongst others free-standing houses,

cluster houses, property used for business purposes and

smallholdings.

Sectional title, on the other hand, provides title to the separate

ownership of units or sections within a complex or development.

When you buy into a sectional title complex, you purchase a

section or sections and an undivided share of the common

property. These are collectively known as units. Sectional title

properties include semi-detached houses, townhouses, flats or

apartments, mini factories, business parks.

Sectional title properties may be used for either residential or

business purposes. Sectional title developments are governed

by a body corporate, which is the collective name given to all

the owners of units within any particular complex. The body

corporate is responsible for managing the scheme and taking

care of its finances.

For the purposes of rates clearance, sectional title and freehold

properties are treated the same. This means that a Rates

Clearance Certificate must be obtained before the transfer of a

sectional title property ('a section') can lodged and registered in

the deeds office. In order to obtain a Rates Clearance Certificate

on the section all the body corporates debt must be up to date.

All owners within the scheme are liable for body corporate debt.

WHAT dEBT IS INCLUdEd IN THE RATES CLEARANCE?

A municipality will charge for any arrears on the property for the

past two years. This will include rates, other municipal taxes,

electricity, water, sewerage, refuse and other sundries. The

amount will also include debt due for a period in advance (the

'assessment amount') to provide for the time whilst the transfer

is taking place. This is a practical measure. The law states that a

rates clearance must remain valid for 60 days from date of issue.

WHEN MAY SELLERS BE REFUNdEd?

The conveyancer will pro-rate any rates required on the rates

clearance between seller and purchaser. If the seller has made

additional payments after the final clearance payment was made eg

un-cancelled debit orders, then the seller will be entitled to a refund.

According to a recent High Court judgment, City of Tshwane

Metropolitan Municipality v PJ Mitchell [2015] ZASCA 1 (29

January 2016), any debt in excess of two years remains a debt

on the property and the purchaser will become responsible for

this debt on date of transfer. It is unlikely that a municipality will

allow provision of services to the purchaser unless this is paid.

Purchasers are advised to ensure that a provision is included in

the sale agreement to protect themselves.

– he pursues real and true value.

• When he doesn’t know what is going on, he embarks on a

fact-finding mission until he has things 'sussed out'.

A GOOd VALUER CAN ONLY dO THIS PROPERLY IF

IT IS A CAREER MATTER

Think of the people you know who dropped out of valuations,

or not did not manage to meet the rigorous admission

qualifications. Almost without exception they are people who

really didn’t see themselves as passionate career valuers, I

call them PCVs.

They just pursued a business or a job or a possible

opportunity. They could have been doing anything else, such

as administration, property broking, or software sales. When

they left valuation, they usually left real estate.

THE VALUATION PROFESSION THRIVES ON TALENT

Can you learn to be a good valuer? Obviously – but up to a

point.

With good instructors, coaches and technical advisors you

can develop into a good cricketer, and even achieve moderate

success. But to be a top-quality, first-class cricketer you

need real talent and extraordinary skills to keep you in the

game and ahead of the pack; most of all, you need passion,

dedication and commitment. Some people have talent and

don’t really use it; some try hard but will never be really good,

and some will never 'get it'. It doesn’t mean that you are a

bad person, just that you don’t have the talent for valuation.

UNdERSTANdING THE MARKET IS ELUSIVE

Many valuers, particularly commercial valuers, focus on sales

confirmation as an indication of good value. That’s more or

less how we were taught, not so?

The ‘report-printer’ is the guy who produces reports with no

perceptive content, confirms the price and prints the report.

The good valuer can’t do that and always wants to know

‘why’. Why did the investor decide on this property rather

than another one? Why did the seller put his property on the

market if it is such a good investment? How was the asking

price determined in the first place?

Commercial valuers ask which income and expense items

were actual and projected, what was the ‘upside’ that the

buyer saw? Why is the investor prepared to put millions of

hard-earned Rand into this specific property?

THE REAL VALUER UNRAVELS ANd ANALYSES

THE PAPER WORK

The good valuer always wants to know what happened to

a certain property in the past. Why was it bought for

R10 000 000 five years ago and sold for R70 000 000? Which

price is not market related? What is there that he doesn’t

know? Why are the numbers not talking to each other and

what are the circumstances? More importantly, how do we

connect these numbers for the sake of the public out there?

The ‘report-printer’ just asks what the price is, and maybe

reads the sales contract so that he can report that he did read

something. He doesn’t have the ability or interest to analyse

the contract and translate it into a material part of his report.

MARKETS FLUCTUATE ANd CHALLENGE THE REAL

VALUER

When markets are changing quickly, up, down, or stabilising,

the good valuer can ‘feel’ when this is happening and

translate that into any current report. The good valuer keeps

track of the pulse of the market by talking with buyers,

sellers, landlords, town planners, friends in construction and

professional property brokers. In doing so he upsets some

clients by considering changes in market conditions when

evaluating market figures.

LOOK FOR A GOOd VALUER

Good valuers don’t change careers – they adjust to become

better valuers. They are passionate about what they are doing.

Generally speaking the good valuer is a lower liability risk. He

takes the extra step to make sure he isn’t missing something.

He lets you know when he is in over his head on an assignment.

Good valuers get their work done on time and they are not

pedantic about a perfect, faultless valuation.

A good valuer adds value.

By Wayne Webley, MetGovis, Integrated Property Solutions

for the public sector

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THE SOUTH AFRICAN


BUiLDiNG GREEN COSTS ON AVERAGE ONLy 5% MORE ThAN CONVENTiONAL BUiLDiNG: STUDy

V

the average cost premium of building green over and above the cost

of conventional construction – or green cost premium – is a mere

5.0% and can be as low as 1.1%.

This is according to the Green Building in South Africa: Guide to

Costs and Trends Report compiled by the Green Building Council

South Africa (GBCSA), the Association of SA Quantity Surveyors

(ASAQS) and the University of Pretoria (UP) which was released

on 15 July 2016. The study includes cost data on a total of 54

Green Star SA office buildings certified through the GBCSA Office

v1 tool up to the end of 2014; 33 of these are in Gauteng, 11 are

in the Western Cape and 9 in KZN.

Manfred Braune, chief technical officer of the GBCSA, says that

the study was undertaken to analyse the actual cost premium of

building green in South Africa, and challenge the belief that green

buildings cost much more than conventional building. “South

Africa has seen exponential growth in certified green buildings,

from the first Green Star SA building in 2009 to the 165th in June

2016. Despite this, there are many more buildings that could be

going green but are not.

One of the barriers has been the apparent green premium

that many developers or building owners have thought going

green would cost them. In the early 2000s, globally and

locally a myth was perpetuated that green buildings cost

20-50% more than conventional buildings. Several international

studies were done a few years later that dispelled this myth, but

South African data had not yet been collected or reported on, so

were not included in the studies. The findings of this study for the

first time show that green buildings can be built for a negligible

premium – between one and 10% – and that this premium is

declining.”

Pursuing Green Star SA certification was found to result in an

average green design penetration of 42.7% of the total project

budget. Green design penetration indicates the extent to which

the Green Star SA Office v1 Rating Tool has introduced green

design into elements of a project, expressed as a percentage

of the total project cost. The study analysed the green design

premium and green cost penetration in terms of location;

construction area; base building cost; tenant mix; vertical façade

to construction area ratio; Green Star SA rating levels (4, 5 or 6

Star); rating type (Design or As Built) and certification date; and

rating tool categories, of which there are nine, totalling 69 credits.

As would be expected, the green cost premium increases as the

Green Star SA rating increases, with an average premium for a 4

Star Green Star SA rated building being 4.5%, 6.6% for a 5 Star

Green Star SA rating and 10.9% for a 6 Star Green Star SA rated

building.

Interestingly, there was a slight difference in average costs in the

three major economic hubs, and a correlation between the cost

premium and penetration. Penetration was found to be slightly

higher in the Western Cape (46%) versus Gauteng (41.8%) and

KZN (40.4%), while the average cost premium in the Western

Cape was 6.9%, 6.0% in Gauteng and 4.5% in KZN. It was also

found that size of construction area had a significant impact on

green building costs, with costs dropping from 9.3% for a building

under 5 000m² to 2.6% for buildings over 50 000m².

Danie Hoffman, programme leader for Quantity Surveying at the

University of Pretoria, says that contracts for larger buildings

often benefit from more competitive tenders because of higher

levels of productivity. “Economies of scale also result in larger

developments having higher efficiency levels (and lower building

costs per square metre) of installations such as lifts, escalators

or air conditioning systems. So a large office development of say

28 000m² with a substantial budget of R350 million will therefore

often be able to afford green building initiatives more easily than a

building with the same specification level but 1 000m² in size and

costing R14 million. Larger projects will also offer design teams

more green design options/scope which all support lower green

cost premiums.”

There were some interesting findings in the analysis of tenant

mix. Firstly, from 2009 to 2011 only 20% of green buildings

were developed for generic clients, or multi-tenanted buildings.

This escalated to 40% during 2012 to 2014. In addition, it was

found that a building developed for a single tenant showed

a significantly higher premium (8.1%) than a multi-tenanted

building at 3.4%.

Hoffman says that this is because single corporate tenants often

set more demanding specification levels and may also strive for

a higher Green Star SA rating as part of corporate marketing

and public image. “Such tenants will in most cases also provide

design teams with more substantial budgets that can allow for

more expensive, state-of-the-art green design solutions,” he adds.

Other noteworthy findings of the study include:

• The green cost premium appears to diminish progressively

over time, largely as a result of the growing maturity in the

green industry.

• Green cost premiums have been declining since 2011, indicating

that the SA green industry is maturing; a higher vertical façade

to construction area ratio yields a higher premium.

• Two categories of the Office v1 tool (Energy and Indoor

Environment Quality) received 58% of the allocation of the total

green cost premium. This is because they carry a combined

weighting of 40% and many of the credits of these two categories

have a direct impact on the operating cost of buildings and on

the quality of life experienced by the inhabitants of buildings.

These credits are therefore often pursued by design teams.

Karl Trusler, ASAQS EduTech Director, says of the Quantity

Surveying firms who provided professional services on these

buildings: “Their skills were ideally suited to providing the

sophisticated data required to arrive at the findings, and

determine the trends of this study.”

“The findings in this report are encouraging and, together with

the findings from the joint MSCI/GBCSA Sustainability Index

that shows that in South Africa green buildings yield a higher

return on investment, they make a strong business case for

green buildings to developers, property owners and corporates,”

concludes Braune.

Manfred Braune

GBCSA CONGRATULATES TShWANEV

the Green Building Council South Africa (GBCSA) congratulated the

City of Tshwane on winning the Africa leg of the Earth Hour City

Challenge for its consistent green policies.

The Earth Hour City Challenge, a collaborative effort between

WWF and ICLEI – Local Governments for Sustainability – aims

to mobilise action by and support from cities in the global

transition towards a sustainable energy future.

Brian Wilkinson, CEO of GBCSA, said: “The GBCSA is

extremely proud of its association, through the Green

Buildings Leadership Network, with the City of Tshwane.

Always showing true leadership in its approach towards

building sustainable cities and communities, we are heartened

to hear that this metro has been recognised as the greenest

city in Africa by an initiative as respected as the Earth Hour

City Challenge.

‘This achievement reinforces the urgent need to design

cities that create nurturing, regenerative, and meaningful

environments that allow the city, its citizens and the natural

landscape to thrive.’ Building collaborative communities in

sustainable cities was a major theme at the annual Green

Building Convention, held at the Sandton Convention Centre

from 25 to 29 July 2016.

Brian Wilkinson

52 53

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FeLLow in Focus

John Will iam Waldeck

Because of distance, it was not possible to sit down and

chat to John, so we had to ask him to give us his own

version of his life story, his career and his association

with the SAIV. We can be sure that it paints far too modest a

picture of what he has achieved, both in his own career and

of all he has done for the Institute.

S A I V a t h o m e

Born in Grahamstown in 1951, John

attended Muir College in Uitenhage and

later Grosvenor Boys' High in Durban,

where he matriculated in 1967 at the age of

16. He was awarded a bursary by the Public

Works Department to study Architecture at

Natal University, but decided against this

as it required six years of study plus another

six years of working for the Department -

far too long a time for a youngster who had

just completed 12 years of schooling.

In John’s words: “As I was only 17 and too

young for military service, I took a position

as clerk with the SAR&H whilst waiting for

my call-up. I underwent military service

in 1969 and started training as a pupil

draughtsman with the SAR&H in 1970 in

the Bridge Drawing Office in Johannesburg.

One year of this was enough to convince

me that the design and drawing of

structures was not for me and I started

seriously seeking another career.

“A family friend, who was a chartered

surveyor and the local partner of Donaldson

and Sons, a firm of London-based

chartered surveyors, offered me a position

as his assistant at the Johannesburg office

on the understanding that once I qualified

as a valuer in South Africa, I would be

required to undergo experience at the head

office in London. So I joined Donaldson and

Sons in February 1971 and commenced

studies at the Witwatersrand Technikon for

the National Diploma in Valuation, which I

was awarded in December 1973.

“My time at Donaldson and Sons was

spent as a trainee valuer where I assisted

the qualified staff with valuations of

residential, commercial and industrial

property throughout South Africa and the

neighbouring states. This often entailed

weeks on the road when valuing all the

Lewis Stores all over the country.

“After qualifying as a valuer in 1973, I

was elected an associate member of

the South African Institute of Valuers on

17 April 1974, by which time I had been

transferred to Donaldson and Sons in

London. I worked as a valuer in their

professional department and carried

out valuations of mainly commercial and

industrial property throughout England

and Wales. Donaldsons closed their South

African operation in mid 1975 whilst I was

in London and, although I was given the

opportunity to remain with the London

office, I decided to hitchhike around

Europe and Asia and then return to SA.

“I joined the Durban Municipality in 1978

as a valuer in the Real Estate Department.

This is one of the few municipalities

where all property matters are dealt with

in the same department, including rating,

purchase, sale, leasing and expropriation.

Durban Municipality in the 1980s and

1990s had one of the largest trainee valuer

programmes in the country and one of

my responsibilities was to oversee this

training. It has been greatly rewarding for

me to see many of these trainees, now fully

qualified and holding top positions in the

municipality, in other municipalities and in

the private sector.

“I stayed with the municipality until 1998

when, having reached my ceiling as

Real Estate Manager: Valuations and

Acquisitions, as well as holding the

statutory position of City Valuer, I resigned

and went into private practice as a valuer

and am still practising - more than 46

years after commencing as a trainee

in 1971.

“My involvement with the SAIV has included

serving on the KwaZulu-Natal branch

executive and being elected chairman;

serving on the National Executive and

being elected National President from

1995 to 1997; and moderating practical

examinations.

“My involvement with the property industry

has included lecturing on rating for a

number of SAPOA Property Intermediate

Programmes; sitting on a number of

Valuation Appeal Boards; and sitting on the

Standards Examining Body of the Natal

Technikon.

“Over the years the main change in the

profession which I have seen has been

the massive increase in the availability

of information, its ease of access as well

as the proliferation of electronic valuation

aids. As a valuer in the 1970s, one’s main

tools of the trade were Ordinance Survey

maps, a good book of road maps, a tape

measure, a set of valuation tables and

a Polaroid camera. There was no GPS

and limited aerial photography; locating

properties needed good map reading skills,

especially in the rural areas.

“Obtaining municipal information required a

physical visit to the municipal offices and

this necessitated at least two visits, one to

the treasury for valuation roll information

and one to the engineer for planning

information. These two offices, even in

the smallest of places, always seemed

to be located at opposite ends of the

town. Sale and rental information required

consultation with the local estate agents,

attorneys and local valuers and oft times

even a visit to the Deeds Office.

“Calculations were usually manually done

as the only calculators available were

large and expensive electro-mechanical

desktop machines. These could only add,

subtract, multiply and divide; and so any

financial calculations required the use of

valuation tables.

“Photographs required development, which

meant that one had to be careful about

noting which number belonged to which

property, and one never knew until the film

was developed whether the photograph

was successful or not. When the Polaroid

camera arrived this required warming the

exposed print under one’s arm before

removing the backing and spreading a

chemical fixer over the image - great fun in

windy and rainy weather!

“Once one had written one’s report, this had

to be typed and checked and if a typing

error was found, the page had to be re-

typed and re-checked. As you can imagine,

this often led to other typing errors being

made on the re-typed page which in turn

required correction and so on...

“Things are so easy today with electronic

access to information held by most

municipalities, Deeds Office information,

estate agent websites, aerial and street

view photography, soil types and crop

yield rates. We have the Rode and SAPOA

reports, digital cameras, even in our phones,

laser distance measurers that calculate

area and volume, laptop and hand-held

computers with word processing and

spreadsheet calculating capabilities. In

fact, the average wrist watch today has

1981 Valuer at Durban Municipality

1992 Real Estate Manager Durban Municipality1973 Trainee valuer

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S A I V a t h o m e S A I V a t h o m e

more computing power than the computer

that was used by NASA to land the first

man on the moon in 1969.

“The problem holding the profession back

today and preventing more young people

from taking valuation up as a career is that

the profession has been regulated by the

government but that no work has been

reserved for it. In short, it is an offence to

hold oneself out to be a valuer without

being registered as such, but it is quite

legal for anyone to perform a valuation.

There is not much sense in striving to

qualify in a profession where anyone is

allowed to perform what you are qualified

to do. It is somewhat like trying to persuade

someone to acquire a driving licence in

a country where a licence is not required.

This is exacerbated by the continued

appointment of sworn appraisers by the

Department of Justice and the perception

by the public at large that a sworn appraiser

is the same as a valuer.

“I cannot really comment on the education

of valuers today save to say that when

I was a trainee, I spent most of my three

years one-on-one as an assistant to a

qualified valuer, gradually performing tasks

such as measuring, calculating, research,

or writing descriptive parts of the report. I

was not let loose to undertake a complete

valuation on my own until I was qualified.

Because of financial pressures, employers

today appear to let their trainees loose

before they have properly acquired and

mastered the required depth of knowledge

and skill.”

in MeMoriaM

c o u rt n e y i a n r e d h i l lit was with great sadness that we

learned of the passing of Courtney

Redhill, Life Member of the Institute,

on 13 June 2016, aged 91.

An extract from The South African Institute of

Valuers: The First Eighty Years. 1909 – 1989

by JH Herman on page 46 reads

"Courtney Ian Redhill (son of the late Sam

Redhill) first attended [Transvaal] Council

meetings in 1953 (before he was elected

to the Branch Executive) as alternate for

a councillor from the Cape Branch. He

served in this capacity for some 12 years

and his reports on the matters discussed

(at those meetings not attended by his

principal) were far more illuminating than

and infinitely superior to the Minutes. He

was elected to the Branch Executive in

1954 and retired in 1989 after serving as

chairman several times. He was a member

of the Council [Natex] from 1966 until he

retired in 1988 and was President three

times. He was elected Life Member in

1982. His services to the Institute were

of inestimable value and he was always

available to do a job when it was required –

and that job was always done properly. His

very keen sense of humour enlivened many

a dull meeting."

John Herman’s history of the Institute tells

us more of Courtney Redhill’s contribution

to the Institute over the years.

In a paper entitled ‘The Aims and Objects

of the S.A. Institute of Valuers’ and

delivered on Friday 23rd April 1971 at a

symposium on ‘Valuations’ held by the

Transvaal Branch, Mr Courtney Redhill, the

Vice President of the Institute, referring

to the original aims and objects in the

context of education, said: “Now it is all

very commendable to have a set of most

worthy and idealistic objects, but it is quite

a different matter to be able to carry them

out, and it is in the execution of these

objects that the acid test lies.”

So in 1982 when Courtney Redhill and

Gordon Adkins were elected as Life

Members, ‘they decided to establish

a Bursary or Prize Fund, to be funded

annually by them by the amounts

which each would have paid as annual

subscription to the Institute’. This Fund was

named the Redhill/Adkins Prize Fund, the

name of the prize winner to be announced

at each Annual General Meeting. The

Prize was awarded for the first time in

1989. In the Natex minutes of February

2013 it is stated that Ben Espach obtained

Courtney Redhill’s permission to move the

1995 President of SAIV

2009 at SAIV Centerany conference

Courtney on 27 June 2015 four

months before his 91st birthday

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THE SOUTH AFRICAN


Courtney and his peers managed to

convince government that this was a good

idea and he was appointed by the Minister

of Economic Affairs to the Estate Agents

Board. He was chairman of a committee of

three who drafted and presented the bill to

the government. There was considerable

opposition to this from the legal profession

which was resolved after discussion. The

valuers also opposed the bill, but the

Minister of Lands was engaged and

interested. He appointed a commission of

enquiry which included a number of senior

counsel, people from Land Affairs, Farmers

Unions, Property Associations and others.

Courtney represented the Institute of

Valuers and the bill was presented to

parliament and passed in 1976.

As far as valuation goes, the family tells

us that in earlier years, he was asked by

clients to be an expert witness at valuation

board hearings when they felt their property

had been valued too high. Because of

his expertise the council appointed him

onto the valuation board (known as the

valuation court in those days) in 1961.

He served on the board for 30 years.

After retiring in 1989 at the age of 65,

Courtney had more time for his many

hobbies. He was exceptionally talented

with his hands, with jewellery-making

being one of his key hobbies for many

years. He was one of the only private

jewellers in the Transvaal with a licence to

keep and work with gold and he had a lot

of fun with gold and silver castings. He cut

many gemstones and his most impressive

was a small topaz cut in a teardrop shape

with 122 facets. He had both metal and

wood lathes in his workshop as well as a

miniature lathe for his jewellery work and

was extremely competent at operating

all three.

He built and raced radio-controlled

yachts at one point for a few years with

his son Rodney. His pride and joy was a

yacht for which he designed, machined

and assembled a miniature proportional

winch for the sails, including a worm

gear - completely reversible. The design

drawings and an article on the winch were

submitted to and published in a British

radio-controlled yachting magazine.

He completed many tapestries and one

fine marquetry piece which took him 160

hours. In his late seventies, he discovered a

passion for trout fishing and made his own

flies. He was a keen boating enthusiast

with a caravan and then a small cottage

on the Vaal River (next to the Barrage) for

more than 30 years. His sons were water

skiers, but he was not.

He had a phenomenal general knowledge,

was a subscriber to Popular Mechanics

for about 60 years and was always keen

to learn new things. This probably explains

his mental sharpness and alacrity till the

end. He had a fantastic sense of humour

which remained with him till his dying day

and was a great fan of The Goons. He

loved classical music. He loved chocolate!

Redhill-Adkins Prize Fund monies from

Nedbank to the SAIV National Bursary

Fund (NBF) investment account at

Investec Bank.

The first issue of Sine Inclinatione, or

Issue 1/77 of a ‘Quarterly Bulletin’ (which

would later develop into The South African

Valuer of today), was sent to all members

in March 1977 and consisted of six

pages. In this issue Mr Redhill wrote in his

presidential message;

"Everything has to start somewhere and

a regular Bulletin from your Institute may

well be the forerunner of a local magazine

or journal which our Profession so badly

needs. The Institute has issued Journals

from time to time, but they have invariably

been ‘one-man’ publications and such a

person is always hard to find.

I would like to congratulate the Publication

and Service Committee on this first Bulletin

and to hope sincerely that it progresses to

the stage where the mail is eagerly sifted at

each quarter by Members in anticipation

of the next issue. In order to keep such

a publication alive there must interaction

between the Editors and members. It

is essential that Members continually

contribute to it. It may be a gripe, or it may

be an article on some aspect of valuing. It

may even be a cry for help with a valuation

problem which is causing difficulty, but

only communication will keep it alive and

you, the members, can do this."

Courtney Redhill was president of the

Institute in 1971 when negotiations took

place to amalgamate with the South

African Institute of Real Estate Economists

(SAIREE) consisting of locally based

members of RICS. The Council decided

to register its name and emblem in 1974.

President Redhill reported back from the

State Herald in 1977 that “although it was

a coat of arms, because it appears on a

shield, it is unheraldic and would have to

be redesigned…This re-designed Coat

of Arms is about to be registered and

will bring us into line with other bodies of

similar stature”. He was also involved in

the prolonged negotiations for the Draft

Bill to provide for the establishment of a

South African Council of Valuers in 1981

and chaired the Legislation Advisory

Committee which considered the

entire Bill.

We are greatly indebted to members of

Courtney's family for sending the following

personal information which gives an

opportunity in their words “to help honour

a beautiful man”.

Courtney was born on 25 October 1924.

He had a younger sister, Marion. At the

age of 12, he was sent to boarding school

in Johannesburg (KES) but went back to

Springs Boys’ High School for the last

two years of school where he received full

colours for shooting. He joined the Signals

Corp after school, but stayed in South

Africa (did not see WWII action). He owned

and rode an Ariel Square Four motorcycle

as a young man and spent two years at

Natal University studying engineering, but

decided this was not for him.

In December 1949, Courtney married Dr

Paddy Miller and they had three children

(two daughters and one son) – they were

married for 24 years. After losing his wife,

he married his childhood sweetheart,

Shirley Jacobson (née Moshal) in 1974,

who had been a widow with two daughters

and one son. Shirley passed away

in 2004.

Courtney passed away on 13 June this

year and was survived by his partner of

11 years, Margrit Franklin, his daughter

Barbara Kristal, a senior radiographer

in London, his daughter Karen Redhill-

Feinstein, a clinical psychologist in

Toronto, step-children Val Mardon and

Steve Jacobson in Durban and Sydney,

respectively, 11 grandchildren and 5 great

grandchildren.

He learned the estate agent ropes from

Major Edgar Isaacs in Durban for a year

before returning to Springs and joining his

father, Samuel’s business in 1948. (Samuel

Redhill (born 1886) was married to Jenny

Kaplan (born 1900) was Mayor of Springs

(1936 to ??) and started the estate agency,

S Redhill and Company in 1915. Sam was

rejected by the army because of kidney

issues, but instead became the secretary

of the Governor-General’s National War

Fund and was awarded an MBE for his

services in 1919 by King George V.)

Initially involved with short-term insurance

and property management, Courtney built

up the business and in the 1980s, and with

a staff of 60, he took on a business partner

(the business name became Redhill Union

Estates). He was one of the first in the

country to computerise his business; he did

much of the programming himself (on an

Olivetti system)! Many of his staff members

stayed for decades, notably Mrs Margaret

Drummond (chief clerk), who stayed for

47 years.

Courtney was elected to the Southern

Transvaal Executive of the Institute of

Estate Agents in the early 1950s and

served on it till the late 1980s (30+ years).

He was awarded Life Membership of the

Institute of Estate Agents and this was

presented to him by the then mayor of

Durban, the late Sybil Hotts.

Courtney joined Rotary in 1965 and in

1971 was elected president. (In 81 years,

he and his father were the only father

and son who were both presidents of the

Springs Rotary Club.) He was also on the

Springs Publicity Association board and

was awarded an illuminated address for

his services to the association and the

town of Springs.

Since 1937, the Institute of Estate

Agents had tried to bring in legislation to

control the activities of estate agents but

had failed year after year. In the 1970s,


Courtney and his late sister Marion

at his 80th birthday party

A topaz cut by

Courtney with

122 facets

Courtney receiving his Lifetime

Membership certificate from the

Institute of Estate Agents circa 1984.

58 59

THE SOUTH AFRICAN


THE SOUTH AFRICAN



F R O M T h E G S ’s O F F i C EV

i would like to start off by welcoming our new president, Patrick

O’Connell. We believe that he will move the Institute forward during

his term of office.

WHAT dOES THE SAIV dO FOR ME?

This question has been raised by many members and potential members.

In brief the SAIV does the following for members:

• We produce and distribute The South African Valuer which keeps members up

to date with developments in the profession by sharing the latest information on

valuation and property matters.

• We create networking opportunities by presenting local branch workshops, talk

shops and seminars that provide members with networking opportunities to

interact with other members.

• We monitor and make representations on relevant legislation in the best interests

of members and their clients.

• We liaise with the South African Council for the Property Valuers Profession

(SACPVP) on matters affecting our profession.

• We are establishing relationships and affiliations with valuation institutions in

neighbouring countries.

• We assist members and companies in bringing career opportunities to members’

attention.

During the past few months we have also AddEd VALUE to your membership:

• We have arranged a 10% to 35% discount on personal insurance cover for our

members through Kern Insurance Solutions Consult.

• We have arranged a 35% discount on Laser Distance Meters from Precision

Device Distributors.

• We have arranged a special discount of R2 300 for SAIV members on Rode’s

Report through Erwin Rode of Rode and Associates.

During the SWOT analysis which Natex undertook at their May meeting it was

concluded that: The best is yet to come!

It is our intention to continue to add value to your membership.

Melanie N Vallun

General Secretary

HAVE A QUERY? CONTACT USMembership: [email protected]: [email protected] queries: [email protected] | 086 100 SAIV

2016 AT A GLANCE

PLEASE NOTE:

• EVENT DETAILS (venues, topics, CET hours and costs)

WILL ONLY BE AVAILABLE CLOSER TO THE dATE OF THE ACTIVITY

• ACTIVITIES ARE SUBJECT TO CHANGE

• PLEASE CONTACT THE RELEVANT BRANCH SECRETARY FOR FURTHER INFORMATION

MONTH dATE BRANCH ACTIVITY

September 1 & 2 CENTRAL Agri Seminar

September 15 KZN Branch Meeting and Workshop

September 16 & 17 NORTH Country Seminar

September 20 SOUTH Branch Meeting

September 22 NORTH Branch Meeting

September 29 EASTERN CAPE Workshop Luncheon

October 11 KZN Mini Meeting

October 20 NORTH Branch Meeting

October 21 SOUTH One-day Seminar

November 4 NORTH MPRA Seminar

November 15 & 16 GS MINI-NATEX MEETING

November 18 SOUTH Branch Meeting

November 24 EASTERN CAPE Workshop Luncheon

November 24 NORTH Branch Meeting

November 24 KZN Branch Meeting & Workshop

60 61

THE SOUTH AFRICAN


THE SOUTH AFRICAN



NORTHERN BRANCH - 2016 - 2017

SURNAME INITIALS NAME CELL E-MAIL

GRIFFITHS (Chair) D DERRICK 083 297 2757 [email protected]

MALOKA MM MOTLATSO 082 321 5121 [email protected]

MINNAAR GP GERRIE 083 230 1188 [email protected]

MYERS (Vice chair) TL TRACEY 083 408 1755 [email protected]

SCHOEMAN TE EDWIN 084 428 1717 [email protected]

SWANEPOEL AM ANTON 082 448 7064 [email protected]

VALLUN AW ADRIAN 083 302 3536 [email protected]

VALLUN MN MELANIE 083 264 2826 [email protected]

ZYBRANDS A ANDRÉ 082 554 9763 [email protected]

SOUTHERN BRANCH - 2016 -2017


DOUGLAS CL CHERRY 083 461 8458 [email protected]

HODGES MA MICHAEL 084 559 7284 [email protected]

HOFFMANN DJB DAVID 083 326 4629 [email protected]

KUYK (Vice chair) T TRACY 081 270 5227 [email protected]

LIEBENBERG A ANDRE 082 784 4232 [email protected]

OCTOBER (Chair) F FARREL 082 461 6481 [email protected]

SMITH AS ALI SU 082 860 4018 [email protected]

SNYMAN RJ RENE 084 656 4404 [email protected]

WARD DS DEAN 082 714 9490 [email protected]

New Branch Executive Committees/Chairs 2016/2017SAIV membership statistics as at 1 April 2016

Members

Fellows

Life members

Retired members

Non-practising members

Affiliate members

Non-resident members

Retired non-resident member

Active members total

Honorary members

Student members

Other members

All members total

50

3

1

54

11

11

65

43

3

1

47

10

10

57

55

1

2

1

59

22

22

81

59

1

2

1

63

24

24

87

134

6

6

2

148

1

40

41

189

127

6

6

1

140

1

35

36

176

433

20

3

12

3

471

6

110

116

587

427

20

2

12

4

465

6

116

122

587

174

15

3

8

2

202

2

38

40

242

175

14

3

8

2

202

2

39

41

243

6

9

15

0

15

6

7

13

0

15

846

45

6

29

8

6

9

0

949

9

221

230

1179

831

44

5

29

8

6

7

0

930

9

224

233

1163

1 August 2015 VS 1 August 2016 Cen

tral

4/8

/201

5

Cen

tral

1/8

/201

6

Eas

tern

Cap

e 4/

8/20

15

Eas

tern

Cap

e 1/

8/20

16

Kw

aZul

u-N

atal

4/8

/201

5

Kw

aZul

u-N

atal

1/8

/201

6

Nor

th 4

/8/2

015

Nor

th 1

/8/2

016

Sou

th 4

/8/2

015

Sou

th 1

/8/2

016

Gen

eral

Sec

reta

ry 4

/8/2

015

Gen

eral

Sec

reta

ry 1

/8/2

016

Tota

l per

cat

egor

y 1/

4/20

15

Tota

l per

cat

egor

y 1/

6/20

16

The decrease in membership is mainly a result of the termination of membership as a result of non-payment of annual subscriptions.

Once the notice period has lapsed without the situation being

rectified, the landlord can proceed with a summons with

an automatic rent interdict or immediate cancellation of the

agreement. In certain instances the landlord can recover their

legal costs for the process, although this is only possible if the

lease agreement makes provision for this. “If after the summons

the tenant has still not made any attempt to pay the outstanding

rental amount, the landlord is within their rights to cancel the lease

agreement. If the agreement is cancelled the tenant will no longer

fall under its protection and will be regarded an illegal occupier

of the property. In terms of the PIE Act, the landlord will then

be able to evict the tenant legally,” says Goslett. Provided the

lease has been cancelled, the landlord can initiate the summons

proceedings for outstanding rent and the eviction proceedings

simultaneously.

There are a few aspects the landlords should consider when

applying for an illegal occupier to be evicted from their property,

such as the fact that the application must be made either to

a Magistrate’s court or the High Court. If the application is

unopposed it can take at least eight to ten weeks for the eviction

order to be granted. Even if the eviction order is granted on the

date of the hearing, it is common practice in South Africa to

provide the tenant with at least another 14 days to find other

accommodation before the eviction order is executed. After this

period the sheriff will be lawfully entitled to proceed with evicting

the tenant.

Cost is another important consideration that the landlord will need

to take into account. The cost may vary depending on the sheriff’s

fees and whether the matter is opposed or not. An unopposed

eviction could cost between R12 000 and R20 000 in legal costs

plus disbursements, while the cost of an opposed matter will be

substantially more.

“It is essential for landlords to take the necessary precautions

from the start to ensure they are protected by the law. Seeking

the advice of a reputable property management agent or attorney

when entering into a lease agreement will ensure that the landlord

avoids unnecessary situations with their tenants and enjoys

maximum protection,” Goslett concludes.

continued on from page 46

62 63

THE SOUTH AFRICAN


THE SOUTH AFRICAN


S A I V a t h o m e

KWAZULU-NATAL BRANCH 2016 - 2017


ALLAN GA GRAHAM 084 712 4104 [email protected]

CHANNING J JANET 082 570 5834 [email protected]

DE WET (Vice chair) DB DIANNE 082 962 1930 [email protected]

FITCHET RM MARTIN 083 253 5725 [email protected]

GOVENDER D DEERAN 083 230 1723 [email protected]

O'CONNELL (Chair) PL PATRICK 082 859 1126 [email protected]

RICHARDSON TB TREVOR 083 616 0788 [email protected]

EASTERN CAPE BRANCH - 2016- 2017


BAKKER (Chair) MA MARK 083 227 3496 [email protected]

EDELSON RJ ROB 082 329 3314 [email protected]

LINDSTRÖM (Vice chair) PJ PENNY 083 625 1181 [email protected]

MOYCE AS ALLAN 083 618 5189 [email protected]

CENTRAL BRANCH - 2016 - 2017


BEUKES (Chair) MR THYS 071 600 5327 [email protected]

DE KLERK (Vice chair) PF PIERRE 082 553 1172 [email protected]

MALAN S STEYN 082 460 1464 [email protected]

P R O F E S S I O N A L D I R E C T O R Y

EAST

ERN

CAPE

GAUT

ENGBOYD VALUATIONS (PTY) LTD

Commercial, Industrial and Retail Property Valuers and Consultants11 Providence Place, Old Seaview Road, Port Elizabeth 6070PO Box 27981, Greenacres 6057Tel: 086 111 1789 • Fax: 041 368 9815Cell: 082 655 9299 (G Boyd) • Email: [email protected] J Boyd: B Com (Real Est), MSc (Property Studies) NDPV, MRICS, MIVSA, Professional Valuer

BRUCE MCWILLIAMS INDUSTRIES (PTY) LTD

Property Managers – Brokers – developers - ValuersBMI House, 85 Cape Road, Mill Park, Port ElizabethTel: 041 396 1400 • Cell: 083 227 3496E‑mail: [email protected] • Web: www.bmi.za.netMark Bakker: Managing Director, Professional Valuer, MIVSA

MASSEL PROPERTYSERVICES (PTY) LTD

Specialists in mass valuation, valuation monitoring, rates policies, expropriations, market valuations, property consultationBuilding No 4, Bartlett Lake Office Park, Bartlett, Boksburg 1459PO Box 5117, Boksburg North 1461Tel: 011 894 2311 • 011 918 4895/6/7 • Fax: 086 686 1952Email: [email protected] F Collatz: Professional Valuer, FIVSA, BTech Real Estate, BComm (Unisa), HDip Mun and Admin Law (RAU), IAAO • d W Lombard: Professional Valuer, MIVSA, NDip Prop Val, IAAO

RATES WATCH

The municipal valuation and property rates watch dogUnit 1, Bartlett Lake Office Park, Dr Vosloo and Trichardt Road, BoksburgS 26 10’14.9” E 28 15’14.3”PO Box 15550, Impala Park 1472Tel: +27 11 918 0544/0237 • Fax: +27 086 504 7720Email: [email protected] Massel: CEO • Kokkie Herman: Director, Rates •Ben Espach: Director, Valuations

GRIFFITHS VALUATIONS

Rynlal Building, Suite 41, 320 The Hillside, Lynnwood, PretoriaPO Box 95099, Waterkloof 0145Tel: +27 12 346 4083 / +27 12 346 3972Fax: +27 12 346 6584derrick Griffiths: Professional Valuer, B.Proc. (NDPV, FIVSA)Cell: +27 83 297 2757 • Email: [email protected]

Attorneys, Notaries, Conveyancers,Valuers, Labour Law Practitioners,Estate and Tax Planning Practitioners29A President Boshoff Street, BethlehemPO Box 693, Bethlehem 9700Tel: 058 303 5241/4 • Fax: 058 303 6926 • Email: [email protected] Breytenbach: MIVSA, Professional Valuer • danie du Plooy: Professional Associated Valuer

BREYTENBACH MAVUSO INC

FREE

STA

TE /

NOR

THER

N CA

PE

EDRIC TRUST (PTY) LTD

Property, Letting, Sales, Sectional Title Administration, Valuations, Insurance Agents22 Elizabeth Street, Bloemfontein 9301PO Box 300, Bloemfontein 9300Tel: 051 448 9431 • Fax: 051 430 8815 • Email: [email protected] V Fullaway: FIVSA, Professional Associated Valuer, AppraiserEmail: [email protected] • Schalk van der Vyver: Candidate Valuer, Student Member • Neil Fullaway: Candidate Valuer, Student Member

VALQUEST

Property Valuers550 Chopin Street, Constantia Park, PretoriaPO Box 32836, Glenstantia 0010Tel: 012 998 6111 • Fax: 012 998 6722 • Email: [email protected] Vallun: FIVSA, Professional Valuer, NDPV • Marius Groenewald: MIVSA, Professional Associated Valuer, BSc Construction Management, MSc Real Estate

VALUDATA

Valuers, Assessors & Property Consultants3 Petrus Street/Straat 3, Heuwelsig,Kimberley 8301 or 1 Angel Street, NewPark, Kimberley, 8301PO Box 80, Kimberley 8300Tel: 053 831 3382 • Fax: 086 657 0342 • Cell: 082 553 1172 (Pierre de Klerk, Sole member of Panprop CC)Email: [email protected] and cc to [email protected] cc t/a Valudata Reg. no. 1986 0158 0123

64 65

THE SOUTH AFRICAN


THE SOUTH AFRICAN


DOUGLAS PROPERTY VALUATIONS CC

Tel: 021 794 2702/20 • Fax: 021 794 2707 • Email: [email protected] members are:Colin douglas: Professional Valuer, Appraiser, BComm, Nat Dip Prop Val, Nat Dip Building Construction • Cherry douglas: Professional Valuer, Appraiser, BA (UCT), HDE (UCT), Nat Dip Prop Val (UNISA)Other Valuers:Paul Bowen-davies: Professional Associated Valuer, Nat Dip Prop Val (UNISA) • Geoff douglas: Professional Associated Valuer, BA Hons (Rhodes) BEd (UCT), Nat Dip Prop Val (UNISA) • Sydney Holden: Professional Associated Valuer, BA BComm Hons, Real Estate, MTRP (SA)

JERRY MARGOLIUS & ASSOCIATES

Property Valuers, Appraisers, Sectional Title Consultants, Arbitrator, Mediator and Umpire PO Box 400, Green Point, Cape Town 8051Tel: 021 434 4702 • 0861 825 848 (VALUIT) • Cell: 082 425 8793Fax Mail: 0866 840 240 • Email: [email protected] Jerry Margolius: M. Phil (UCT), NDip Prop Val, HDip. Arbitration, FIVSA (Life), Aarb, MRICS, Professional Valuer, Chartered Surveyor (Valuations)

MILLS FITCHET MAGNUS PENNY

Countrywide Valuations of Property for all purposes. Specialising also in Agricultural/Forestry Property. Offices in Johannesburg and PietermaritzburgSuite 303, Newspaper House, 122 St George’s Mall, Cape TownPO Box 4442, Cape Town 8000Tel: 021 424 5284/1540/1287/1782 • Fax: 021 424 1146Email: [email protected] A Gibbons: AEI (Zim), FIVSA, Professional Valuer • M R B Gibbons: NDPV, CIEA MIVSA, Professional Valuer • Kyle Keefer: Candidate Valuer

STEER PROPERTY SERVICESt/a STEER & CO

Valuers of Commercial, Industrial and Residential property. Also valuers of Plant and MachineryPO Box 1879, Cape Town 8000Tel: 021 426 1026 • Fax: 021 426 1183Email: [email protected] • [email protected] M Hofmeyr: MIVSA, Professional Valuer, Appraiser • John P van der Spuy: MIVSA, NDPV, Professional Valuer, Appraiser • Nina Vass: BSc (Hon) Property Studies (UCT), Professional Associated Valuer, Appraiser

Property economists, valuersand town planners. Valuationsnationwide of all property types11 de Villiers Street, Bellville 7530PO Box 1566, Bellville 7535Tel: 021 946 2480 • Fax: 021 946 1238 • Email: [email protected] Rode: BA, MBA, Professional Valuer, FIVSA, CEO: Rode & Associates (Pty) Ltd • Karen Scott: BCom Hons, Professional Valuer, MIVSA, MRICS • Monique Vernooy: BTech, NDREE, Professional Valuer, MIVSA • Madeniah Jappie: BSc Hons, Professional Associated Valuer • Tobias Retief: B.A, NDREE, Professional Valuer, MIVSA • Janelle van Harte: Candidate Valuer • Marlene Tighy:BSc Hons, MBL, Pr Sci Nat, Professional Valuer, MRICS

RODE & ASSOCIATES (PTY) LTD

WES

TERN

CAP

E

APPRAISAL CORPORATION

Professional Valuers and Appraisers withoffices in Cape Town and Southern Cape. Member of SAPOA35 Kloof Street, Cape Town 8001PO Box 4157, Cape Town 8000 • www.appraisal.co.zaTel: 021 423 6400 • Fax: 021 423 6410 • Email: [email protected] F du Toit: NDPV, NDPD&M, FIVSA, Professional Valuer, Appraiser • Ms J L Falck: BCom (Hon), FIVSA, MRICS, Professional Valuer, Appraiser • S E Jacobs: NDRE, Professional Associated Valuer • W R Green: NDRE, Candidate Valuer • R Jackson: BSc (Hon) Property Studies, Candidate Valuer • K C davids: Candidate Valuer

ADVAL VALUATION CENTRE

Property ValuationsUnit 8, Mountain View Office Park, 28 Bella Rosa Street, Rosendal, Bellville 7530PO Box 5339, Tygervalley 7536Tel: 021 914 9062 • Fax: 021 914 2184www.adval.co.zaJ F (Johan) Cilliers: BTechPV, NDPV, FIVSA, MRICS, Professional Valuer, Appraiser • A Cilliers: BTechPV, NDPV, MIVSA, ProfessionalValuer, Appraiser

WES

TERN

CAP

EGoIndustry DoveBid SA

Valuation, appraisal & disposal specialists of industrial & corporate plant, machinery, equipment & propertyA liquidity services marketplaceNational footprint, global reach10 Evelyn Road, Retreat, 7945, Cape TownTel: 021 702 3206 • Fax: 021 702 3207www.Go-Dove.com/southafricaJohn Cowing (Managing Director), [email protected] John Taylor (Associate Director), [email protected] Kim Faclier (Property Managing Director), [email protected] donovan dalton (Head of Valuations), [email protected]

MPU

MAL

ANGATETRAGON VALUERS (PTY) LTD

Professional ValuersPO Box 2654, Evander 2280Tel: 017 632 1552 • Fax: 086 514 5981Email: [email protected] • Witbank • SecundaJ J Steyn: Professional Valuer, NDPV, MIVSA • J Reyneke: Professional Valuer, NDPV, MIVSA • O J Potgieter: Professional Valuer, NDPV, MIVSA • WJ Nel: Candidate Valuer

MILLS FITCHET

Countrywide valuations of property for all purposes. Offices in Gauteng, Cape and KwaZulu-Natal

“We value our land” • “Si linganisa intengo yomhlaba”Tel: 033 330 6990 • 033 234 4321 • Fax: 033 330 3158 • 033 234 4751Cell: 082 895 8880 • 082 781 3875Email: [email protected] • [email protected] R Stephenson: BAgric Mgt, AFM (UK), LLB (Natal), FIVSA • T R L Bate: MSc, BSc, Land Econ (UK), MRICS, MIVSA • S B G de Klerk: MSc, BSc Bldg, Pr.CPM, MCIOB, NDPV, MIVSA • S Aldridge: NDPV, CEA, MIVSA

VALUERS AFRIKA (PTY) LTD

Valuers, Appraisers, Property Consultantsc/o de Clerq and Wes Street, Ermelo 2351PO Box 2472, Ermelo 2350Tel: 017 811 2212 • Fax: 086 676 4502 • Email: [email protected] Winckler: Professional Valuer, Appraiser (FIVSA) • Ian Müller: Professional Valuer • Sydney Lukhele: Professional Associated Valuer • Christiaan Winckler: Candidate Valuer, Professional QS

APPRAISAL CORPORATION

Professional Valuers and Appraisers withoffices in Cape Town and George. Member of SAPOAUnit 3 Beetlewood, 25 Wellington Street, George 6529Tel: 044 874 1902 • Fax: 044 874 2831 • Email: [email protected] • www.appraisal.co.zaM J Steinmann: NDPV, NDCS, MIVSA, Professional Valuer, Appraiser • J F du Toit: NDPV, NDPD&M, FIVSA, Professional Valuer, Appraiser

SOUT

HERN

CAP

E

KWAZ

ULU-

NATA

L

SAIV members are encouraged to become

part of the Professional Directory. Promote

your company and support your profes-

sion’s mouthpiece.

Articles and letters are welcome.

Contact The Editor:

[email protected],

[email protected]

or on 011 442 5644

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